This a very good question and one that can be kept simple. Our recommendation is that you first get preapproved so you have an idea of the price range you should be considering and have a approval letter on hand once you find a home you want to make an offer on.
Your next task is to identify the type of home you prefer and the location(s) you are primarily interested in.
The final step is finding a real estate professional to support your search and lead you step by step through the process. May buyers feel it is important to have someone other than the bank's listing agent working with them.
Foreclosures are really not much different than buying from a seller except the makes not have a heart.
1. If it is owned by HUD, your best bet may be a FHA mortgage, and especially a FHA 203k rehab mortgage. This is key if the property is not currently habitable.
2. Expect to pay between $350- $500 for a good professional home inspection, and ideally don't use a H.I. that was recommended by the realtor. You never know.... As stated below, expect the seller (bank) to do nothing for you- even for the sake of doing the inspection. You may have to pay utility reconnection fees just to get things checked out and tested. This could be another few hundred $$.
3. Important- find out how long the property has been vacant. The longer its been vacant, the more things will likely need repair or attention- even those things you can't see or the home inspector misses.
4. It will take you a long time to get an answer back from them on your offer. First they will verbally accept it, and then all the papers will be signed- by numerous representatives on their side.
Thanks, and good luck,
I also always make sure the buyers understand the home most likely is sold "as is," so if they do an inspection, the bank is not going to make repairs. They also could be required to pay to have utilities turned on for the inspection.
Hope that's helpful.