Auctions are a great place to find a bargain, particularly if you're a house hunter. And because they speed up the buying process - you have to complete within 28 days - there's no chance of being gazumped.

For these reasons, interest is growing among first-time buyers and buy- to-let investors. The Royal Institution of Chartered Surveyors says auctions account for 5 per cent of all property transactions in the UK - a figure that is rising all the time.

But auctions are also fraught with potential pitfalls. Many vendors like the quick sale but this is often because the property has structural problems they hope the buyer won't spot. And bidders can get swept away by the excitement of it all and pay over the odds.

However, you don't have to be a millionaire property developer to buy successfully at auction. Do your research and you will minimise the chance of things going wrong.

The main problem is the extremely tight deadline: once the hammer comes down, you are committed to the deal. You must pay a 10 per cent deposit on the day of the auction, and the other 90 per cent within 28 days. Fail to pay on time and you will forfeit your deposit and lose the home. You are also responsible for buildings insurance on freehold properties from when you exchange contracts.

To speed up the process, ensure your finances are organised before you bid. Paul Stockwell, associate at mortgage broker Savills Private Finance, specialises in arranging auction finance quickly. Buyers pay 1 per cent of the sale price for the service.

efore you bid, it is worth sorting out an agreement in principle with a lender to ensure there are no issues, such as adverse credit, to stop you getting finance," he says. "There is nothing worse than something cropping up when you are working to a tight timescale."

Many lenders will even instruct a surveyor to value the property before the auction. You should also instruct your solicitor, who will obtain any Special Conditions of Sale, title documents, lease details (where applicable) and searches from the vendor's solicitor. If your bid is successful, you will have to exchange contracts in the auction room, so you should know what you are letting yourself in for.

Once you've reached this stage, there should be very little that needs to be arranged. As soon as the funds are agreed and released, and you've settled up with your solicitor, the sale is complete and the property is yours.

Contact: Savills Private Finance, 0870 900 7762.

No hammer horror: tips for bidders

Attend a couple of auctions first to see how it all works.

Look for details of property auctions in local and national newspapers and on the internet. For a list of auction houses, go to www.rics.org/ property_auctions.

Send off for auction catalogues, detailing properties for sale.

Arrange a viewing through the auction house if you are interested in a property. If you are relatively new to the property market, take a builder or surveyor with you.

Commission a survey if you aren't sure how much work is required. Most people don't bother in case they aren't successful at auction, but it could save you a lot of money in the long run.

Arrange financing. Use a broker or contact mortgage lenders direct. And gather your paperwork - including six months of payslips, bank statements and proof of address - for when the lender requests it.

Don't get carried away when bidding. Stick to a price limit.

Ensure you have enough cash to pay the deposit on the day.

`I paid less than my budget'

Harmail Panesar, 32, bought a house at auction last week. The pounds 180,000 property, in Northolt, Middlesex, is in need of complete refurbishment, so Mr Panesar plans to spend around pounds 20,000 doing it up.

He now has 21 days to complete before the auctioneer's deadline expires; if he doesn't do so in time, he stands to lose his pounds 18,000 deposit.

"I obviously don't want to lose my deposit, as it's my life savings, and my main worry is that the sale won't be completed before the deadline," says Mr Panesar. "But the fact that I bought the property at an FPD Savills auction, and they're also arranging my financing, is reassuring - it speeds things up."

Mr Panesar is being advised by Paul Stockwell from broker Savills Private Finance. His funds are all arranged, pending the property's valuation. If the mortgage lender is happy with this, Mr Panesar should complete well within the deadline.

His aim is to remortgage and release funds from the property, based on the increase in value once the necessary work has been completed. This money will be used to fund further purchases. He advises anyone buying at auction to do their homework first. "I went to several auctions before I did any bidding to see how it all worked," he says. "I spotted the property I ended up buying in a catalogue, and visited it twice before the auction to make sure it was what I wanted. The bidding was nerve-racking but I ended up paying less than my budget, so I'm very pleased with the result."