So - I found a property that I want to own (not an investment per se).

Turns out that the sheriff sale has already occurred and the people living there have a 12 month redemption period in my state. Property was listed in June and the sale was early July.

The asking price is $170k, and the bank bid $130k at auction.

My maximum offer price is $100k - the structure is a teardown and I would be essentially buying the land only. It appears the realtor is listing the property at an exorbitant price considering the condition of the home.

Questions:
1) I feel concerned that they are asking $170k when the bank only bid $130k at auction. If they had a second / home equity loan, would that have been wiped out? How do I find out whether the bidding bank was in the first or second position?

2) What are my options to proceed? It seems pointless to work with the homeowners - their objective is to sell and walk away with a few bucks and potentially a less damaged credit.

Since they have a 12 month redemption, I feel that I have only 2 options:

1) Work with the homeowners / realtor to negotiate a short sale with the bank. Not sure why the bank would even want to do this at this point, but worth a try.

2) Inform the bank of my interest and wait out the redemption period.

Other options?