a potential buyer needs to find listings of homes that are set for foreclosure. You can do this trhough your real estate agent or by simply looking online.
secondly, you should be very familiar with the foreclosure laws for your state. A real estate agent would be familiar with this process.
Conduct a title check on any property you are interested in.
Assess the value of the home, pay notice to if the home needs any serious repairs.
Make sure you are prequalified for a mortgage.
One thing to note when buying a foreclosed home is that you recieve the home "as is". Meaning if any damage has occured to the house, you will have to fix it yourself. This could be a problem in some circumstances when buying the home.
You can buy a foreclosed home in a couple ways.
First, a auction. There are two types of auctions:
The first is referred to as "All cash" where the property is simply auctioned off on county courthouse steps- these dont guarentee a title, and dont give the percepective buyer to inspect the house. Unfortunately most auctioned homes are sold this way.
The second is run by an auctioneer selling on behalf of banks. This type of auction has financing and inspection reports available
Second, is short sales. Short sales are properties that have already been repossessed by the bank. Owners have to get the banks permission when attempting to sell the house.
Typically, banks will sell the home for about 10- 15 % less than non foreclosed homes. If you can get lower that is great, but remember not to pay to much for a home you might have to fix up.