Bank Auctions vs Short Sales vs REOs

The banks are understanding how to get the best prices for their new inventory of homes. Advertise the hell out of a public auction, cram 5,000 people into the Cow Palace (or any other convention center of choice), provide easy financing to all who have a FICO score anywhere near 600 and price these homes at ridiculously low prices. Recent example: $550,000 value Belmont home, now REO, listed in brochure for $275,000 - what a deal! - 10 buyers bidding on this home and one "winner" happy to take the keys for $620,000! Good luck with that one. This makes sense why banks are more apt to let a property go to foreclosure than deal with a short sale.