It depends on where the property is in the foreclosure process.
Pre-Foreclosure: Owner receives Notice of Default. Buyer negotiates with owner but must be able to pay off at least the amount owed on the mortgage. Traditional sale happens here.
Mid-Foreclosure: Owner receives Notice of Sale. The time between the notice and the sale allows the owner to complete a Short Sale. Buyer must have bank approval. This is long, drawn out and a game of patience.
Auction/Sheriff Sale: Buyers usually are competing against lenders for the property. Must have funds to pay for the purchase immediately. No inspections, no warranty as to condition. Buyer beware. Any liens written after the one under foreclosure are still active on the property.
Bank Owned Property/REO: After the redemption period after auction. Properties are usually listed with real estate agents. Inspections allowed. Liens removed. Clear Title. Traditional sale happens here.
Here is some additional information: "Foreclosure Overview": http://www.bankforeclosuressale.com/overview.php