When you buy at a foreclosure auction there is an amount the bank is bidding to protect their investment. Frequently you can buy a house for LESS then you would at the auction if you wait until the bank owns it. I bought a house for myself from a bank, paid $7k less than I would have at the auction and got the bank to pay for installation of a new fence around an inground pool and give me $3k credit towards a new boiler. I contacted the bank directly after the sale and as I was a broker, they sent me the keys to inspect the property. The bank was happy someone qualified wanted to purchase the house as they wouldn't have to pay a broker's commission and own the property for longer than they had to. I bought the house for $193k and sold it a few years ago when the market was down for $492k. Yes, they can be good deals if you know what you're looking at. They "can" be a great deal to buy at auction, but it depends on your risk tolerance.
Licensed Associate Broker
Douglas Elliman Real Estate
I"ve also heard of some instances where the banks try to limit the amount you can resell the property for.