How to buy a house at auction

1. Do your research
You're more likely to get a bargain now than in years past, due to the current financial climate. Once you have a clear idea of what you're looking for, register with local auction houses for details of their future auctions. Also check out the Essential Information Group. It works with over 450 UK auction houses, listing details, pictures and guide prices for forthcoming auctions. When you've found a property you're interested in, contact the auction house responsible for its sale and get hold of a copy of its legal pack (approx £20-£50). This will give you (and your solicitor) details of special conditions of sale, leases, title deeds and/or searches.

2. Arrange a visit
Visit the property several times before the auction – this can be arranged through the auction house. With properties in need of renovation, it's not unusual to bring a builder or surveyor with you to get a clear guide of what work is necessary and a rough idea of what it will cost. Check with local estate agents or online with the Land Registry, nethouseprices.com or upmystreet.com to find out what similar properties in the area have been sold for.

3. Know your budget
Before you go into the auction, you must decide on a budget, factoring in extra costs that the purchase of the property is subject to. As well as stamp duty, you will have to pay an administration fee of anything up to £250 on a sale to the auction house. Adding that to the price of a legal pack, your solicitor's fees and any building work that needs to be done when you buy the property, these 'hidden' costs can easily creep into the thousands. Finally, don't go without having a mortgage agreed beforehand. Once this is in place, you can contact the auction house and make an offer on the property to see if it tempts the vendor into withdrawing it and selling it to you before the date of the auction.

4. The auction
It's a good idea to visit another auction beforehand, to get an idea of how they work. On the day, you'll have to bring along two forms of ID and a cheque book, as you'll need these if your bid is successful. When you arrive at the auction house, ask for a copy of the addendum – this details any changes made to listings in the original catalogue, for instance if a vendor has withdrawn or sold a property before the auction date. Every lot will have a clear guide price – around 85% of what the auction house expects it to sell for. Each lot will also have a reserve price – the minimum amount the vendor is prepared to sell for – but this is not revealed before the auction. Pick a place in the room where the auctioneer can see you and, when bidding, make sure that your actions are clear and definite. Always stick to your budget – in the heat of the moment it's easy to get carried away and overspend. Once the gavel falls on your bid, you are the legal owner of the property and must pay an immediate 10% deposit and the balance within 28 days.

5. Absentee bidding
If by any chance you are unable to attend the auction, you can bid online, by phone or in writing. You should contact the auction house beforehand for details of how to do this.