1.) Over Bidding
It's best to bid the asking price or a little lower to avoid problems (cost) from a new appraisal.
2.) TaxesMany people that are not aware that certain state transfer taxes from Federal Government ownership to a private buyer are waived. Causing many to over pay on transfer taxes of the foreclosed property.
A majority of lending companies are unaware also because of the small amount foreclosure transfer they do. You have to make sure they know the rule in your state in order to save this money.