Curt gave a very good explanation of the auction process. If you need further info on the best option to purchase a home in your price range in Santa Cruz, I would be happy to meet with you and go over the various options to purchase the best home for you.
Millou Rose, Realtor Bailey Properites
This home is being auctioned online. The price quoted is the starting bid, and you can expect it will get bid up considerably. There are a couple of things about the auction process to keep in mind: in most cases and this is one of them, they are cash only sales, so financing will not be an option. There is also what is called a buyer's premium of 5% of the selling price due at the time of sale. In this case, it is also occupied by tenants who have a 1 year lease, so assuming you are looking for a home to move into, this would not be a good choice for you. Here is a link to the website where the auction will be hosted, just FYI. http://www.auction.com/California/residential-auction-asset/
Most of the "foreclosure" or auction listings that you will see on Trulia show a price that is too good to be true, because it's either the starting bid or the amount of default on the loan, not the full balance due. You may be sure that the lender or seller will get as close to fair market value as they can if and when it sells, and in a competitive market such as we have right now, there will be plenty of bidders.
Searching the local MLS will probably give you a truer picture of what homes are actually selling for. If you'd like info about how to access that, or if you'd like an automated search that sends you listings that meet your criteria for a home, please feel free to call or e-mail me for details. Good luck in your quest for a home!