To know if the price is right, check out Zillow.com for an automatic valuation - this is not a perfect tool but will give you some idea. Next, pick a good realtor specializing in distressed properties and working the area you are buying in. Please use http://www.CDPE.com
(for distressed property experts) or Trulia.com for Find a Pro option. Your realtor will provide you with the comparable sales (past 6 months, in the same building) - so that you will be able to figure out the correct value.
The prices are based on size, location (proximity to the beach), condition of the property, type of sale (distressed or not), views, how high the floor is, demand vs. supply and if improvements were made to the property in question.
Auctions, with their bidding wars, often lead to overpaying for the property, and there are many potential problems with them - like title issues and work done without permits (illegally). Same could be said about foreclosures (no title issues, but lien issues there).
Hope this helps,
Beachfront Realty, Inc.