First time buyer - San Diego

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All,

I am not sure if this is the right place, but any help/direction is MUCH appreciated.

My wife and I are looking to purchase a house in the San Diego area, preferably in the 92130 zip code. We want to purchase a foreclosed house, as not paying out the nose is a huge goal of ours (and probably everyone else!). The idea is to live here for several years, and then maybe upgrade to a bigger house when possible. My questions for you fine people:

1) How do I find houses that have been foreclosed and are available at a large discount? Should I contact banks or are there well known national/regional clearing houses I can contact?
2) Are there any pitfalls I should be aware of as I look?
3) Can any of you help? :)

Thanks in advance, and I look forward to hearing from you all.