Michael is right, just make sure you're in the position to have knowledge. If you're not local, get an agent or lawyer to represent your interests.
Auctions are common and lots of folks pick up great properties this way. You may even want to join with an agent who flips foreclosures, with yourself being the investor.
You can always contact a local agent who can research the property ahead of time, send photos, or just look up the last sale of the house and send a report to you.
Making an offer before the auction is moot. The reason for the auction is to get the best price. If you have the best offer, you'll get the home.
Let me know if you have any questions.
Many properties that are currently hitting the foreclosure market have no equity and are therefore a waste of time. I can tell you I have watched a few unbelievable deals happen in the last few weeks.
I would be happy to help you understand this process fully. There are other things to consider beyond price. For example is the home still occupied and who will evict the owners (another legal process) , will bankruptcy court reclaim the property (another legal process), and what condition will the home be in when all is said and done.
I am not trying to scare anyone away from this process but I encourage everyone participating to do your research. There are plenty of horror stories on the net about people who have not done their diligence.
Anyone who would like to learn more let me know.
Big auction in Phoenix in March, a friend of one of my associated bought nine homes. The bank turned around and rejected every single offer on Monday because none of the offers met the original reserve.
Inspections also are a mixed bag. If the property's in the MLS and there's a lockbox, your agent (or the agent you find to help you) can get you into the house. On many auctions, there are only two set times for inspections and there are no post-auction inspections allowed. Essentially, the gavel goes down and it's yours, so long as the bank accepts the offer.
You can make an offer before the auction if it's in the MLS (and probably otherwise) but if you're going to base your offer on the minimum bid listed for the property, you're going to be disappointed.