Buying at auction. Is it really a good buy?

This has been the topic of discussion lately with my good friend and business partner Will Daly. We have been working on a few new and exciting incentive programs for certain buyers who have unique needs and requirements. As we looked into auctions as an avenue for our buyers to purchase urban property we've uncovered possible challenges. 1). Banks do not have a good understanding of how to value urban condos in the current fluid market. Many times they are so disconnected from the micro economics of these types of properties and unfortunately consult real estate practitioners that do not know the niche as well. This causes the banks to misvalue the property when it goes to auction usually based more on the mortgage value rather than current market value. This is why many urban properties go back to the bank rather than purchased at a trustee sale by a third party. 2). There is no traditional title services with these transactions which means the property 'could' have clouds on the title and possible unmarketable deed. 3). Properties purchased at auction need to close within 24 hours so there is no traditional financing with these properties. You need to pay cash. Of course you can finance the property after the fact but you'll need to cash at close. 4). Mostly buyers will not be able to view the property prior to purchase so it's truly a "buyer beware" transaction and buyers need to be fully informed of the project they are buying into and any possible risks. 5). Buyers need to be working with a real estate professional before hand to truly pinpoint a value on the property that is coming up for auction and any weighted risks. You will have no idea if the bid price set by the bank the night before is reflective of the current market value. What looks like a steal might be expensive unless the right analysis is done before hand. These are things we think about everyday to help ensure a positive transaction for our buyers.