We have just completed on a reposession. I saw it on Rightmove before xmas and viewed it through a normal estate agent. It hasn't been ripped to pieces at all and has a new kitchen, boiler, light fittings etc still in place and undamaged. The gas and water were turned off when we viewed but they are working fine so far (touch wood).
We offered £1000 under the asking price initially which was accepted but had to increase to £1000 over the asking price in the end because another interested party made an offer on it. The Estate agents who were selling it were very good at putting other people off once we had a secure mortgage offer and only put a small notice in the local paper (instead of a large notice on Rightmove like many do)
We were told we had 28 days to complete but infact took just over 7 weeks without a bad word being said by the repo company (apparently the 28 day timeline is to put people off who are not in a postion to proceed quickly) but if you are moving along nicely that puts you in a really strong postion should another party make an offer as they are effectively at square one.
I'll not lie, it has been a really tense few weeks as we knew it was a bargin and was sure someone would come along anytime and gazump us, but we were really lucky that our sale was going through over christmas and New Year when I don't think many people were looking (except me, Rightmove addict )
And as for them going up for auction I know a reposession that was on for over a year with an estate agent with a 60% price drop before it went to auction, I don't think it happens very often as they usually get snapped up.
P.S If you really think you're going to like it, try and get one of the first viewings available and have you're finaces sorted for that day so you can make an offer there and then if you want it, because speed really is everything. Good luck