Let's say you have good credit and minimal outstanding debt.

Or will they go after the title company (someone mentioned this to me), because the title company did not catch the outstanding red-flag permit on file with the city?  

You need a cash buyer, and beware of any outstanding liens/judgments or title issues on the property when someone is willing to sell a house in good condition, for half price.  

You can get an idea of outstanding assets from paid research sites like prop radar etc.What I do not know - why do so many of seemingly good properties get "withdrawn" before the auction, do large investors/pros approach the owners and buy them before the auction?

It is admittedly a bit of an odd area in terms of layout since it has the highways and train tracks breaking it up, but it's still very affordable.

They currently have an outstanding $565 utility bill from Q3 2016 with me that they still haven't paid.

3) If an outstanding balance is remaining on the senior lien after a "leftover payment" from the junior lien, what are the steps to contacting and paying off the senior lien once I purchase the property at auction?  

The city attorney's office seized the property from the landlord due to the 16 outstanding orders of abatement on the property. 3 occupied, 1 vacant and 4 "guest rooms" in the basement that was overrun by druggies, drug dealers, bike thieves, etc.The 3 occupied units upstairs were vacated through several different strategies and one case of dumb luck on our part.Only one person in the basement claimed tenancy with a lease.

@Caroline Barnett sometimes the reason people don't switch utilities is do to having an unpaid outstanding balance with the utility company.

In Texas the owner must file their petition before the second anniversary of the date of the sale of the property and they are divvied according to all that is owed ie: all outstanding legal debts in the order they occurred.