Shelby: Some of your questions are self-evident.
Auctions specifically due to forfeiture of repayments tend to dispose of single as opposed to batches of aircraft and the experience varies from one disposal administrator to the next.
Aircraft condition is critical in an auction scenario and if the administrators managing the disposal have not hired the services of an aviation company to assist them (they usually do) then arrangements must be made so that you can bring along a mechanic to inspect the craft. When an aviation broker/agent is involved they understand this requirement and the opportunity to inspect the aircraft is usually in place.
If the bids do not start below market value then, clearly, the auction has little appeal. The auctioneers will usually be guided with the assistance of an aircraft sales broker who in turn looks not only at the market value but also at the number of respondents. The greater the number of those attending the bidding the lower the initial bidding value (normally).
There are many variations to this scenario including disposals which are handled more like tenders where bidders have a one time opportunity to submit (in writing) their offer with the highest bidder being selected.
There are always terms and conditions .. mainly that once your bid has been accepted and you are in receipt of the 'goods' that the seller's responsibility (and liability) ends. But, again, this varies from seller to seller.
At the end of the day most auctions/disposals are no great mystery. Take the time to analyse all the information being provided, make sure you clearly understand the bidding/offer and payment/delivery terms and, above all, make sure you are acquainted with the condition of the aircraft. You may not be in a position to carry-out a full pre-buy but .. recruiting a mechanic for the day to thoroughly inspect the craft and help you survey all the log books is money well spent.