There is so much talk about Foreclosures, Short Sales and Bank Owned properties, but in my day to day business, I've found that most people don't understand the difference between them all. Here is a brief overview.
Foreclosures: A foreclosure property is one where the owner is behind on their payments and the bank has issued a Notice of Default and scheduled a date for a Trustees Sale. During the time between the issue of the Notice of Default, and the trustees sale, the homeowner can sell their home to pay off the loan, or take other measures to avoid the foreclosure. At the Trustees Sale, the home is sold in a bidding environment, and the purchaser must pay for the home in cash or cash equivalent at the time of the sale. There is no time available to arrange for financing. Another caveat to buying a foreclosure is that you also may be "buying" other liens or loans, so you need to take great care to know exactly what you are purchasing. Many homes listed on the foreclosure list are listed for the 2nd or 3rd mortgage. If you were to purchase that, you would still be liable to make the 1st (and possibly other) mortgage payments. You also are liable to pay any tax and other liens as well.
Short Sale: If a homeowner wants to avoid foreclosure by selling their home, but can't sell it for what is owed, a short sale may be available to them. A short sale is where the bank agrees to accept less than what is owed when the home is sold. In a short sale, the homeowner can accept your offer, but that doesn't mean it's a done deal. The lender(s) must also accept the offer. In most cases it takes several months for this approval to take place, so don't plan of buying a short sale unless you have 3-4 months at least for the process to take place. In purchasing a short sale, you do have the time to arrange for financing.
Bank Owned: When a home goes to the Trustees sale, and is not sold there, it goes back to the bank (or mortgage lender) and becomes Real Estate Owned or REO (Bank Owned). Most of these homes are sold "as is" and are listed with a Real Estate Agent on the Multiple Listing Service for sale. These homes have had the outstanding liens and additional mortgages removed, so they can be a much cleaner transaction. The acceptance time typically takes weeks not months as with Short Sales. In many areas, Bank Owned properties can be very distressed, but in North Carolina we've seen many that are in reasonably good condition. As with short sales, you do have time to obtain financing.
I hope this gives you an idea about how to go about buying a North Carolina Foreclosure, Short Sale or Bank Owned Property. There are some great deals to be had, but buying these type properties can be very complicated. I strongly recommend using an experienced Realtor® like myself to help guide you through this process.