Has anyone noticed that I like to answer a question with a question?
First, I ask my buyers if they want a foreclosure or if they want the best deal. Ninety nine times out of ten (yes, 10), they want a deal. We all do. What a deal consists of is different for everyone. For some, it means the lowest price. For some, it means where price, sweat equity, and my buyer's particular choice of amenities (school district, neighborhood, pool, location, etc.) all meet at a particular point to make a particular home work for the buyer's situation. For many more, it ultimately means lots of cosmetic work in a particular price range.
Whatever it is for you, make sure that you and your agent are on the same page. You, as a buyer, might not even know which page you are on or in which book! Find an agent who will help you figure it out. When a buyer asks this question, I take my buyers through several steps to determine just how much sweat equity they want to put into a home. As someone who has personally renovated several homes, including an historic one, I am not afraid to walk in to true "fixer uppers". Again, my definition of a fixer upper is not the same as your definition. So, we use several steps to get on the same page.
Speaking of sweat equity, if you think that you want a foreclosure or fixer upper, be prepared to put in some work. I mean real work. I do not mean a paint job. Yes, I personally know two people who have purchased pristine homes that were foreclosed properties. I have been successfully selling real estate for eleven years. The fact that my number is two should tell you something. Every property is different, but, as an example, be prepared to update the kitchen, fix some flooring, and clean out the gutters. If you can handle that, the payoff can be handsome for you and your home ownership dream.
Now, let's move on to foreclosures, specifically. There are many services out there that will charge you to look at their lists of foreclosures. DO NOT PAY! A good real estate agent will be happy to set up a search for you and send them to you for free. I keep my eyes open and my ear to the ground to find out about foreclosures before they come to the market with a sale sign in the yard, but you, as a buyer, can also look in the classifieds section your local newspaper.
Happy House Hunting!