The short answer to your questions: I believe bidding usually starts at the amount owed on the property that’s being foreclosed, and highest bidder wins. The terms are usually as-is, with a fraction of the final bid due the day of the sale in certified funds, and the remainder due shortly after that (like 30 days).

Now, if you want a useful answer, I’d find a friend who does this in your area and pick his/her brain. See what s/he does to research potential properties. Maybe reduce his/her risk by going into a property together. Help him/her out. Attend a few foreclosure sales to get the feel for it.

Or try searching “foreclosure investing newsgroups” or “discussion boards” as a start of an internet investigation. Or pop into Borders or Barnes and Noble and leaf through a few real estate books.

As far as whether foreclosures are risky, it depends on everything in the deal. The more you can find out about what you’re bidding on, the more likely you’ll be to get a good deal, or at least recognize that the bidding has gone too high.

Good luck!