Shelley, Curt Abramson from Bailey Properties here. That's a good question. i'm going to assume you're speaking of a trustee's sale on a property under foreclosure. In that situation, typically a bank is trying to recover what they can from a loan they made to the homeowner. If there are first and second mortgages, usually the second mortgage holder is the one initiating the process, since they will lose all their money if the first mortgage forecloses.
Usually the price will be set by the lender, shortly before the sale, when they have all the costs and debts calculated and know what it will take to satisfy any senior liens and get the property free and clear. To win the bidding at a trustee's sale, you will not only need to outbid others including the lender, you need to be prepared to pay at the time with cashier's check.
I've heard that 98% of the time, the lender is the successful bidder at these sales, and is then free to market the property as an REO (Real Estate Owned, a bank term) on the MLS through a local agent. Most buyers find that to be the most effective time to make a bid on a property they're interested in.
Hope that answers your question. Good luck!