Hello @Cameron Riley & @Dennis M.:
In PA, and in other states, auctions can mean different things.
There are private auctions where I just choose to sell my home in an auction scenario (I actually think this is pretty common in Australia - maybe someone from Oz and chime in on that).
Auctions can also refer to the compelled or forced sale of a property by the State/County for various reasons.
I assume you are asking about the 2 most common forced sales - foreclosures (failure to pay your mortgage, bank sues and the Sherriff sells your home to satisfy the bank) and tax sales (failure to pay your taxes and the State/County sells your home to satisfy your tax bill).
I have not participated in the PA foreclosure and tax sale business in 20 years, so things may have changed, but if someone here is more up to date maybe they can correct my answer with new info.
Both types of sales have their own areas of risk that you need to educate yourself on.
Value is a top issue - you need to know how much the home is really worth before you get into any of the below. You will need to do the math on the various other debts to know what price you can pay to actually make a good deal.
Title is always an issue. You need to know WHAT you are buying and what other rights it may be subject to. Tip - look for IRS liens (bad news). I remember plenty of railroad track embankments that were up for sale (railroads were exempt from abandonment/sales by law, but the slopes of the land on either side weren't and they always popped up - of course completely useless as an example). I remember we also bought the maintenance shed at a cemetery once.
In foreclosures, you always need to know WHO is foreclosing and what other mortgages you are buying the home subject to. For example, is it the first mortgage who is foreclosing? Or is it a second or third mortgage. Who is bringing the action will determine which mortgage will still be on the property after you buy or which other lenders may show up to bid to cover their junior mortgages. Advanced topic - buying up debt at a discount on a home can be a great tactic to give you an advantage at a sale. Just another reason to try to establish a good relationship with bank REO departments.
Tax sales are an entirely different animal. Back when I played in this sandbox there were 2 separate tax sales when a property was delinquent. The first sale was subject to all mortgages, etc. (I think it was the Upset Sale). The second sale, of the homes that didn't sell at upset were about a year later and were free and clear so that meant that the banks showed up and made sure the bids covered their debts.
Anyway, there is SOOOOOOOOO much more to it.
I would recommend the following :
1. Start going to the auctions (if they are even still live at the County - they may be online now).
2. Check out the PA CLE classes offered by the PA Bar, etc. If there are any on tax sales and foreclosures, I think they are a GREAT investment of time by would-be auction investors.
3. I would not be opposed to paying a good tax sale/foreclosure attorney for 2-4 hours of their time to give you a good briefing on the law in the area. It won't solve all your problems, but it will give you a good idea of red flags to look for. You don't need someone in a center city big firm. There are lots of great experts in the county's, with small offices, who will do it for a reasonable price.
Anyway, that's my incomplete, short answer. I am happy to share any knowledge I have if you would like to chat.
