Ok, the difference between a "pre-foreclosure" and a foreclosure is this. The lender first needs to file a notice of default (pre-foreclosure), before they can actually foreclose.
If you buy a house that has had a notice of default filed (public record here), then you would be dealing directly with the owner. You would need to contact them, and give them an offer... granted this can be tricky because you should expect some form of an emotional response. Be careful with this, and I would certainly recommend by phone for first contact. Don't show up on someone's doorstep saying "hey yer gonna lose your house, mind if I buy it?" ... you could get popped in the nose...
A foreclosure is when the bank/lender actually takes back full ownership of the house. At this point you'd be dealing with them.
It's 50/50 as to where you'd get the best deal from, although I'd lean towards getting the best deal from the owner more often than not. Especially if you can buy their house, and they will walk with some cash in hand. If the bank snags it, they will walk with nothing. Additionally the value compared to what is owed is the key. Many people are going into foreclosure because they are upside down in their house (owe more than it's worth), and can't refinance. Most are in short term loans that have now gone adjustable, so they are basically trapped. In this situation, you'll get a much better deal from the bank, and realistically the owner couldn't do much.
Getting into more detail on the last comment. A bank has to spend lots of money and time doing a foreclosure, and then selling the house. They will often do what is called a "short sale", where the property is sold for less than what is owed, and the bank just eats the loss. So this is another option you can consider. The bank could be very excited to unload a house skipping the entire foreclosure process.
As far as getting access to this type of information there's many ways. Most loan officers, or real estate agents should have access to this info through the title and escrow company they use. Additionally, you could contact a title company directly and ask if they could send you the stuff weekly. Make mention that you will use them as your title company for your purchase, assuming the buyer allows it. NOD's and foreclosures are both public record, so you can access them. There are paid services on the internet which can allow you to access this information as well.
Once you target some houses, it's time to do some homework. You would ask the loan officer you are working with to pull property profiles on the target properties. They will be able to see what the last loans on the properties were, and give you an idea of what it's worth. Once you actually find some targets you wish to pursue, contact an appraiser and try and get a more realistic value to solidify you position.
At this point, you now decide what to offer, and how to offer it. You can enlist the help of a HELP-U-SELL type realty company if you wish. They have super low fees, and you can nix the commissions. The benefit of bringing someone in is mainly to protect you from screwing up on the sale portion. You can of course do it yourself, but I'd buy a book and read up on it before you tried this.
I think that about covers it
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Buying a home in foreclosure?
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