Slow sales and record foreclosures left 2.9% of all homes vacant, and 2.23 million empty homes up for sale, during the final three months of 2008.

The Census Bureau says that's the country's highest vacancy rate since 1956. It provides potential buyers with more leverage to pay less and dicker for all sorts of incentives.

Many empty homes are foreclosures now owned by a bank. Those houses and condos typically sell for 10% to 15% less than comparable homes in the same neighborhood, even after you've made all the needed repairs. Savings of 20% or more are not unheard of.

Our 10 smart moves for buying a foreclosure can help you get the best deal and avoid costly pitfalls.

Individual owners, for example, may be especially motivated to sell an empty home because they're paying two mortgages -- one for the vacant home and one for the property they live in now.

You can use that to seek a lower price and incentives, such as having the owner pay some or all of your closing costs and provide a home warranty.

Builders who borrowed the money they needed to construct a new home are losing money every day it sits unsold. So besides haggling over the price and closing costs, ask them to write off the cost of any extras they included in the home, such as upgraded appliances, premium flooring or whirlpool tubs.

Whether you're buying a home or refinancing an existing mortgage, we have a mortgage calculator that can help you make the right decisions.