This depends upon which auction company you are working with. There are several different auction companies. Some are good, some are not so good. Typically, each auction requires you to have the deposit available in a cashier's check at the time of bidding. But beware, not all auctions are alike. You would expect to be able to purchase a home if you are the high bidder, however several of the auction companies in Southern California have minimum bidding requirements. If this minimum is not met, the house will be placed back on the market with the bank's Realtor.
I've seen this happen time and time again as the agent on both the listing side and the buying side. A few months ago I took a buyer to an auction that advertised NO minimum bids. Unfortunately, he was outbid by one other person. A few weeks later, I received a call from the auction company advising me the winning bidder had backed out and that my buyer was next in line. I was excited for my buyer at first until the representative stated that my buyer would need to raise his bid $30,000. I found that the previous buyer only backed out because the bank would not accept his auction price and raised the purchase amount.
Keep in mind that the REO bank has the option to accept or deny the winning bid. I suggest you have your Realtor go over all the auction registration terms with you in detail so you can attend the auction well prepared. Also, keep in mind that there are so many more REO homes on the market than there are at auction. And in this current Real Estate market, EVERY bank owned property is ON SALE. If you really want to buy an REO house at "auction", merely have your Realtor provide you with several properties to look at.
Good luck with your home buying endeavor. Let me know if you have any questions or I can be of any further assistance.
Realtor - Certified PreForeclosure Specialist
Keller Williams Realty