1) If this is a courthouse auction you will have to have a cashiers check at the time of sale. If this is an auction sale, your financing can be used to buy the home.
2) If the home sells at auction, either way, those sales become comps. The key word is sell. In recent foreclosures where the bank takes the property back as Dave describes it means the loan is higher than value. In this case the ownership transfer is not a comp since there was no sale. A leinholder made a legal claim and was not an arms length purchase.
We have seen many instances of lenders taking the property back at that minimum price and then put it on the market with an agent at substantially less... sometimes this leads to multiple offers, sometimes not.
Virtually all the homes scheduled for "foreclosure auction on the 8th" have "estimated bids" (what the bank wants) that are substantially higher than the "estimated value" ... according to the data source we use ... talk to Dave Sutton (in my office)... he has all the data
Regardless, there is a great deal of risk in buying at auction. Unlike a normal purchase, if you find out after the auction that there's something major wrong (no furnace, serious mold, or a host of other nasty things). you can not back out of the sale (as can be done with a normal sale).
Lastly, before they let it be sold at a bargain basement price, the lender will buy it at something approaching
FMV to protect their loan, even though they are way underwater.
road when the market gets turn around. The way you pay for this prop[erty will depend on whether the seller is accepting finance deal or all cash deal.
The sale (if it was done) would affect the FMV of comparables in the area, especially the units within the HOA.