There are a lot of good answers below with good information. You should also understand several more issues with foreclosures:
1) just because the property is a "foreclosure" does not mean that it is a good deal. For example, the house may have been listed at $1.4M before foreclosure, and after foreclosure is listed at $999K, but in today's market and in the condition of the property, it may only be worth $800K, so the $999K asking price is not realistic. A good agent should be able to explain the specific market to you.
2) You are going to have to be willing to accept the property in as-is condition. While there some banks (some of the ones that I work with) that will make some repairs and updates to foreclosed homes, the vast majority of them do nothing to the house.
3) You are going to have to have your financing lined up or proof of funds. No bank which is selling property will entertain an offer if this is not lined up.
If you have more questions, please feel free to let me know.
Investment Property Specialist
Evergreen Real Estate