The horse I have came from an auction. I didn't get her by my friend did, and I bought her off him for the same price.
She turned out really well. Actually her temperament has improved significantly from the auction, so while you may be wary of drugged horses the ones who aren't are under a lot of stress.
Around here a few people buy horses from the nearest sales. The ridden ones sell for below market, the unridden for kill money. You've just got to make a good call, go early so you can hopefully see the horses arrive and meet the owners. If the horse is really actually decent often you'll find the owner there willing to talk to you and tell you about them. But this is probably more common in small sales.
If it seems really too good to be true then often it is. The other day there was this beautiful Appaloosa mare, registered, points, and because we were early we saw them leading her to the float and she was stepping short with one leg. "Miraculously" later she was sound. Still sold for a fair price as a broodmare but much below what she could have advertised elsewhere.
I'd probably actually look for the skinnier ones with poor feet, because to me that shows their owners can't afford or aren't inclined to care for them anymore. Where as a fat one with good feet, in good nick, well I wonder why it hasn't been sold on the open market.