L. Roper, are you talking about a Notice of Trustees Sale or Foreclosure Auction on the County Courthouse steps or are you talking about a bank auction. There is a difference. Trustees Sales do not have a reserve they have an opening bid. They can be a waste of time and they can be very lucrative. They require a lot of research into items such as who intitiated foreclosure, what lien position the person is in, the market value of the property, the condition of the property, the Trustees Sales Guarantee report and what bidding will start at. In Yavapai county they require $10,000 to bid and the total due via certified funds payment by 5pm the following business day.
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.

Auctions tend to turn out to be a waste of time, though there are exceptions. What you see is the opening bid which usually is well below current market value. What you don't see is the reserve - the minimum price the lender's willing to accept for the home.

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.

Auctions are an interesting way to purchase. I woudl be happy to help you understand them but it would take more conversation than typing here. If you are truly interested you are welcome to contact Michael Yarnes @ 928-533-6859. There are some pitfalls to be aware of when buying at auction.