Many borrowers who are in default or who owe more than the house is worth, will try to sell the property before the auction day through what's called a "short sale." Essentially, when someone is trying to shortsell, they are asking the bank to take less than what's owed. Buyers who wish to buy a shortsale property have to expect to be very patient as banks typically do not respond very quickly to shortsale requests. They respond a lot faster to offers once they own the property. Bank owned properties are known as REOs (which stands for Real Estate Owned).
Great question! You need to do a little research in your area to see houw forclosures are done. Look on the sheriff sale list etc. That does not mean you have to wait until the sheriff to try to purchase the property. The addresses are listed. You could make contact with a homeowner and try to reach an agreement to buy before it goes to sheriff sale. I would recommend getting an agent to help you with this as it would be nice to have someone who knows the business a little on your side. At lease the first time or two. Good luck
The offering price are not low especially there is no warranty. What you have never seen or inspected is what you get....
The same applies to an auctioneer scheduled sale where he gets you all excited and you find out
you bid over the valuation price.