A two-bedroom, two-bath San Diego condominium for $85,000. Builders offering a $70,000 discount on a home in Austin.

These are some of the startling bargains America's Realtors are seeing these days, as mortgage lenders' efforts to reduce their inventory continues to generate a veritable buyers' paradise.

"We're seeing amazing deals right now - some really good-quality deals," says Erik Weichelt, president of Weichert Realtors Elite in San Diego. "Just about all of them are distressed properties - bank-owned homes that have been through foreclosure. For example, in the city of El Cajon [in San Diego County], you can find some nice condos that have been converted and are on the market at fabulous prices. We sold a two-bedroom, two-bath the other day for $85,000 - during the peak of the real-estate market, that would have gone for about $275,000."

In case you think such deals on distressed properties could only be had in blighted neighborhoods, Weichelt - who's also president of the San Diego Association of Realtors - notes that many of the bargains he's seeing are in some of the county's trendier regions.

"We have very similar examples of these kinds of great deals in the community of City Heights," he says of the hipster neighborhood, north of San Diego's Balboa Park. "In Paradise Hills, we have pretty spacious, four-bedroom, two-bath homes selling for $225,000."

A big reason for the glut of remarkably low-priced properties in relatively upscale neighborhoods is the classic "bubble effect": Areas that saw the biggest gains during the housing bubble were hit the hardest when the over-inflated market finally popped. Realtors in once red-hot markets like Phoenix, Las Vegas and Atlanta are regularly listing spacious, bank-owned homes for upward of $100,000 below what they were asking for just two years ago.

"It's critically important that they get that home inspection," says Weichelt. "You just don't know about the inner workings of a home until an inspector has looked at it, particularly when you're dealing with a distressed property. Banks don't have to provide the new owners with a transfer disclosure statement. "

Socar Chatmon-Thomas, president of Elegant Estates by Auction in Austin, Texas, also stresses to her clients the importance of having bank-owned homes independently inspected. She also advises first-time buyers to avoid making offers on "short-sale" homes - properties whose owners "returned" to their lenders for below what the homes were actually worth.

"It's a very large and grueling process to buy the home at that point," Chatmon-Thomas says. "It can take months to get through the paperwork. "

Chatmon-Thomas also suggests perspective buyers to look for properties that have been listed for a few months without being sold - the longer they remain unsold, the lower the asking price will be.

"Start with homes that have been on the market for 90 days or more," she says.

Like Weichelt, Chatmon-Thomas is also seeing her fair share of screaming-hot deals.

"Two months ago, I had these clients who were relocating from Houston and looking at properties in northwest Austin maybe 30 minutes from downtown," she says. "The clients were interested in a property that was maybe $70,000 above their budget. It was a builder's home - I've seen builders give discounts but never a $70,000 discount. I said, 'There's no way this builder is go to lower the price to your price range,'" she continues. "I was wrong - they lowered the price."

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