Whether or not you find buying a foreclosed home to be ethical is a personal decision. You could feel you’re taking advantage of the next guy’s misfortune, or you could feel you’re taking an empty home off the market and helping the community. But buying a home at an auction is like jumping into a shark tank whose dark waters are filled not only with individual home buyers but also professionals who know what they’re doing. Lots of bank-owned properties look like a good deal from the outside but aren’t, and you need to know the difference. To shop smart, do what the big boys do. Don’t try to buy a foreclosure in an area you don’t know well, because most bad real estate investments are made in somebody else’s backyard. Look at all the houses a few weeks before the auction. If you find a few you like, take a shrewd broker back with you to tell you what the house is really worth before you decide on your bid. If you can’t get inside to inspect the homes, also take along an experienced contractor to give you his estimate as to which improvements are needed and what they might cost. Once you’re at the auction, tr4y to bid on the first few houses because they always sell for less while other buyers are hanging back to see where prices will land. Make sure to dress in your Sunday best and stand in the front close to the auctioneer. This will give other bidders the impression you’re a professional. Once you raise your paddle, the other bidders may assume you’re from the bank and stop their bidding.