My wife and I actually went to one of those foreclosure auctions which was held at the convention center. There were a few thousand people inside waiting to get a deal. Some if not most of the properties were being above its true value.
Initially, that seemed surprising but if you read the pamphlets tiny print, you will realize that the bank or its investors can bid against the real investors to prop up their prices. This is known as shill bidding and is not really fair. If the bank or quote investors really want to get a certain price, then they should simply put a reserve on the property or start at the lowest price they are willing to accept and sell the foreclosed properties at.
You can actually tell the bank was bidding too high because they would win the bid. This defeats the purpose of unloading the property. So what happens at these auctions after the bank or investor accidentally overbids? They put the same property back up for bid again multiple times which makes the whole process longer and extremely boring. It also makes people realize that these auctions are not true auctions.
Overall, the experience was not good. You pay for parking and wait for 4 or 5 hours for the properties you want to bid on. You go there looking to get a deal and ready to bid against other bidders for property you like, but don't want to be tricked by the house auctioneer. The bank or its investors have no intentions of buying the house back, yet they are allowed to bid just to try to bump up the prices. This part of the process makes them look like fraudsters or professional con men.
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