If the stickers were showing "ceased" all over the place as you suggest, then this is NOT a foreclosure rather just that, a "ceasure of property" likely over something other than property taxes...could be drug related, or more likely income tax issues.
These auctions are typically NOT included in the typical tax sale auctions because tax sales would include properties where the owner failed to pay the property taxes. Those properties are not normally "ceased".
So read the sticker carefully.
In either event, you bid on the property at the appropriate time (auction date) and you have NO recourse once your bid is accepted. It is sold as is. Cash!
Plugged septic lines, broken pipes, heat exchangers that are cracked, and plumbing lines that are plugged are all possibles. Also there could be issues with boundaries and other legalities which makes this type of purchase very risky for those who don't know what they are doing.
On the other hand, purchasing a HUD repo which was once sold on FHA or other government insured loan and foreclosed upon, is much better and safer option.
HUD owned properties provide a detailed report of an inspection (which by no means is quantitative or even sometimes highly accurate, but does provide you with something to at least make you aware of what the inspector found prompting you to dig deeper before you bid on it.
Once you submit your bid, the property can then have a thorough formal inspection and you can BACK OUT of the purchase if there are significant differences between what you found out and what was on the report subject to the limitations provided for in that HUD report.
HUD also often provides financing with the asking price being the government appraisal which you would need in any type of financing if you are going that way. Generally, if the property can't be fixed up to government standards with about $5k of work, then it is considered "uninsurable" and no financing is provided. You can still have it inspected professionally and back out of the deal if you find that there is more wrong with the property than the government report specified.
The HUD deal is a sealed bid process so that the property won't start "climbing the ladder" as would normally happen in a voice bid process which will happen with the treasury ceasure, or tax sale auction.
There have been and still are some pretty smart deals to be had via the HUD repo purchase, and HUD will even give you some money toward closing costs if you build them into the purchase bid. It is safer for most people and only real pros should be opting for the ceased property for all the issues that can befall the uninformed purchaser there.
If you are still bent on going the ceased property route, then find someone who is polished in this process and pay him to help you on it. You would be well advised to solicit the help of this professional and then you can STILL get burned if he isn't as polished as he seemed or he simply "Missed" something.
caveat emptor.. let the buyer be ware!
