Think “foreclosure” and the image that springs to mind is often the ramshackle, boarded-up house on the wrong side of town.

Those homes are still there, along with lots of upscale digs, in a list that experts say is growing fast as the housing market cools and sharply higher interest rates kick in on adjustable-rate mortgages.

But if you’re a house shopper thinking this is a great time to land a cheap home at the next sheriff’s sale, be forewarned: The numbers don’t tell the full story, and trying to buy a home this way can be an extremely risky, time-consuming and even costly proposition, especially for the novice.

The numbers do appear staggering: In September 2005 in New Jersey, there were 967 filings of lis pendens — the first stage of foreclosure. This September, there were almost 1,650 filings — a whopping 71 percent increase, according to the foreclosure data service Sheriffsalesonline.com.

* * * IF YOU GO… • Sheriff’s sales are held weekly in county courthouses: Fridays in Bergen, Tuesdays in Passaic and Mondays in Morris (Tuesdays after Jan. 1).• Information on properties available can be found in newspaper advertisements or picked up at the county sheriff’s department or in Morris County, online at mcsheriff.org.• You must have between 10 percent and 20 percent of the total sale price in cash at the time of the auction. The remainder must be paid quickly — usually within 30 days. The money must be paid, even if the previous owner is still occupying the property.• For more information: Passaic: 973-881-4200, Bergen: 201-646-2200, Morris 973-285-6600.

Those findings are echoed locally, according to another foreclosure tracking company, RealtyTrac. In the third quarter of 2006, there were 947 properties in all price ranges at some stage of foreclosure in Bergen, Passaic and Morris counties. That’s a 100 percent increase compared with the third quarter of last year.

“These days a lot of these houses are not in disrepair, it’s just that people can run into financial trouble no matter where they’re starting from,” said Jeff Posner, who runs the Fair Lawn-based sheriffsalesonline.com.

Celia Chen, director of housing economics for Moody’s Economics.com, noted that adjustable-rate mortgages that allowed buyers to capture low interest rates for several years — sometimes as low as 3 percent — are now re-setting to higher rates, and owners are paying the piper.

“In some cases, these monthly payments are doubling,” Chen said. “A good share of these buyers were barely qualified for a mortgage even at those lower interest rates.”

Increases in foreclosures also are seen anytime the real estate market slows, said Rick Sharga, vice president of marketing for RealtyTrac.

“If a homeowner is in financial distress, the last two things they need are an extended time to sell and lower prices,” he said.

With all the doom and gloom, only one in four properties that enter a stage of foreclosure are actually foreclosed, said Mike Fratantoni, senior economist for the Mortgage Bankers Association. In most cases, lenders work out deals with the owners, or owners sell or file for bankruptcy.

And, he said, the group’s data also showed that out of the 1.2 million existing loans in New Jersey, less than 1 percent were in a foreclosure stage in the second quarter of 2006. That’s a similar figure to last year.

How to explain the disparity? Each side argues that the other has an agenda and can tweak numbers slightly to serve their purposes.

The Mortgage Bankers Association noted that foreclosure-tracking companies are selling a product — the data on properties — mostly to investor-buyers. Sharga, of RealtyTrac had a similar point.

“If my funding came from lenders … I would probably lean toward a more conservative approach and get the message across that everything is going along fine,” he said.

For a buyer looking for a deal, once a home does go into foreclosure, bargains can be found. Bidding on a Franklin Lakes home up for auction in October at a sheriff’s sale started at $631,000. The property sold for $835,000, but one investor said his estimates put the home’s value at $1.75 million, though that’s not typical.

But foreclosure buying also brings a huge amount of personal legwork, risk, expense and responsibility. First, you’re often bidding against banks, or savvy investors who buy and resell properties quickly. Second, foreclosed owners get numerous time extensions, which can tie up a buyer’s money.

Disgruntled owners have been known to sabotage their properties. Buyers should always do title searches on properties to make sure there are no outstanding tax liens or hidden secondary mortgages.

“This is like buying options on futures — it’s as risky as you can get in the real estate business,” said Dennis Kessler, a Sayreville real estate broker who specializes in foreclosures. “Yet, we have new people showing up at the courthouse for every sheriff sale.”

Posner said foreclosure buying can be a boon for an aggressive, informed and confident buyer, saying he’s seen savings up to about 20 percent.

“As the market gets worse, it’s probably going to get even easier for the average residential buyer,” Posner said. “Nothing is selling these days … so you’re not going to be competing with as many investors — if they can’t flip it themselves, they’re not going to want it.”

Sheriffsalesonline.com is just one of many companies that sells data on properties in foreclosure. The service charges $40 per state, per month. Most of the information is public record, but Posner said his site makes searches easy, comprehensive and quick.

For both investors and personal buyers alike, Posner said the best way to get a foreclosure property is to knock on the owner’s door during the early stages and express an interest in buying.

“It’s awkward, it’s not easy,” he said. “But often an owner in foreclosure would rather see the property go to another owner, rather than the bank.”

Additionally, owners can be persuaded to sell because it often reflects better on their credit history than going through with a foreclosure, he said.

Establishing a relationship with an owner allows the buyer to not only see the property in person and obtain the all-important inspections, it also makes the transition easier from foreclosed owner to new buyer.

If a property is bought at a sheriff’s sale, the new buyer has the responsibility to evict the foreclosed owner. Often it is more cost-effective to offer the owner a cash incentive to move out quickly, rather than fight in court, Posner said.

Kessler, the Sayreville broker, cautioned that foreclosures are not always a bargain.

“Most of the people currently owe more than the property is worth,” he said.

For example, a home may be worth $425,000, but the foreclosed owner owes $450,000, thanks to high interest rates or an adjustable-rate mortgage. When the property goes to a sheriff’s sale, the bank will often want to recoup its investment — the higher amount — no matter what the home is worth now, Kessler said.

About 40 people attended a recent sheriff’s auction in a wood-paneled jury room at the Bergen County Courthouse in Hackensack. Three properties — in North Arlington, Oakland and Cliffside Park — were auctioned by a uniformed sheriff’s officer; a total of 20 had been listed for sale, but most were postponed to later dates.

As each of the three properties were offered for sale, a bank representative stood up and read a statement warning prospective buyers that the property in question was subject to sale “as is,” and may have liens on it. Then the bank representative said the bank would be willing to bid an amount greater than the unpaid judgment.

In all three cases, the bank won the bidding — in two cases, without any competition from the audience. The entire auction was over in about five minutes.

The vast majority of bidders at sheriff’s sale are investors like Raj Patel, who said he buys about 15 to 20 properties per year at foreclosure and flips, or quickly resells them. He also bought his own home that way, paying $475,000 for an Edison home that in 1994 was worth $675,0000.

Patel has a real estate license and pays several employees to assist him with the process, from investigators who scope out properties to bookkeepers. He estimates that he can earn $75,000 to $100,000 per property after deducting money spent to buy the home, repair it, pay taxes and other expenses while he’s flipping the property.

Patel estimates that about 75 percent of the people he sees at sheriff’s sales are investors like himself. Patel was the investor who bid on the Franklin Lakes property, but ducked out when the bidding got too high.

Staff Writer Kathleen Lynn contributed to this article.

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