SD Realtor has bought at auction. I believe he and a few other investors pooled their money to do this.

I considered it seriously a few years ago as a way to pick up a more affordable rental property and asked him a bunch of questions.

Some things to know:
– The auction date can (and probably will) change before it finally gets sold at the steps.
– There is no contingency of any kind. You are buying it AS IS. No inspection, no title report, nothing.
– On the subject of title report… you need to make sure that you are bidding on a first trust deed. On rare occasion, the second deedholder will foreclose. In that case you’re not getting the property…. Learn to check the grant deed databases and make sure you know what your getting. This is NOT for the inexperienced or amateur.
– The payment is made in cashiers check and cash. Since you don’t know the final amount, apparently folks bring a base cashiers check – and incremental ones to add to it…
– The opening bid price is rarely posted ahead of time. It may be posted the night before – but more often, it’s posted the morning of the auction.

If it’s being short sold – you can probably arrange to get in the house before the auction under the guise of being interested in buying it under short sale – if you have someone who can do an informal inspection, bring them with you.