First, don't hijack someone else's thread, it's bad forum etiquette. But since the post is nearly 3 years old, and it looks like you've been searching I'll answer. I've been buying foreclosures (from sheriff's sale) and REO's (after the bank gets stuck with it and puts it on the market) for 9 years. I've found good luck at the sheriff's sale (but rarely, as most houses are bought back by the banks holding the mortgage) and better luck with REO's (aka lender owned). The thing about REO's is you can get inside and have inspections if you want. With foreclosures at the sheriff's sale, it's buyer beware. You can't (legally) get inside, nor is your purchase contingent upon any inspection.
Worst case scenario, true story, but not mine. House sold at sheriff's sale for $90,000 (market value was $100,000, so buyer thought they were getting a good deal - FWIW, I would pay a maximum of $70,000 at sheriff's sale for a house worth $100,000 that needed minimal amount of work & money, so my thought was this was surely an amateur who bought it). He closed, had the deed put in his name and entered the house. The house unfortunately, was riddled with termites and had to be demolished - at a cost of $10,000! So he ended up spending $100,000 on a property worth no more than the value of the empty lot (maybe $20,000). So, as I said, buyer beware, but I have had good luck.
