After a domain expired, it will pass through a number of states, before it gets deleted. The last state before the deletion is the Pending Delete State. If the domain reaches this, the previous owner can not renew the domain and it will be deleted after exactly 5 days! It also gets removed from the zone file. Conclusion: The Domain will definitely become free and you could be the new owner!
Because the previous owner does not control the Domain in this status, the registrar is the temporary
owner and he can decide what to do with it. He could just do nothing and let the domain name get deleted,
but this is just the second best option for the registrar, because Domain Names are valuable and they don't
want to give something away for free. So the registrar can either register the Domain for himself or he
auctions it of. If someone bids on the domain name he get's some money and if not he can still just let it drop.
Win, win for the registrar. The auction before the drop is called Backorder.