Buying a property at auction can be a daunting task for first timers. You need to have a good idea of what it is you're looking for. And if the home has been foreclosed on, then this is doubly true.

Research any home you are planning on bidding on if at all possible. Get the specifics of the property such as its size, how many rooms, amenities and how much was owed on it. Find out if there are any back taxes on it as you will be responsible for them.

Your local agent will have details on all the available foreclosed homes in your area.

First off, you should always compare other homes for sale in the area so you have an idea if the foreclosed property is a good deal or not. Sometimes regular sales are a better price than a foreclosed property is, so it's a good idea to check around.

Any property within a three mile radius of the property you are considering can be used as research into the local market. Compare houses that are of similar size, condition and age.

Make sure you can secure your financing ahead of time. At auctions, you will need to have the cash in hand or at least a deposit check for the minimum amount. Deposits are usually around $1,000 to $5,000 and you must have financing for the additional amount already in place.

Know your limits - have a budget and don't exceed it. The thrill of the moment can see you bid higher than you had originally planned which can get you into trouble down the track if your payments become too high.

If you find the deal isn't right for you, then be prepared to walk away from it. Don't think you have to stay and purchase the property because you are ready to. Make sure this home is what you want and you are willing to do the work needed to repair it. Never get into any bidding war to win any foreclosure auctions as there are many such sales going around or you will regret it in the long run.