Have you ever witnessed an auction? Perhaps you saw a recent Storage Wars episode or maybe one of those classic car auctions where the auctioneer conducts the proceedings for some very high end automobiles. What is the auctioneer’s duty? It’s foreclosure auctionnot to identify the person making a bid, there are spotters for that.

No, the primary duty is to work the audience up in a feverish pitch to have people bid against one another. The higher the price, the more the owner of the auction item is paid and the auctioneer’s commission check is higher.

You can also find an auction of houses at a foreclosure auction. There will be some variances as to the procedure but overall, the concept is the same—lenders provide property information to the local county or sheriff’s office the bank has foreclosed upon and hopes the bidding process is enough that meets the lender’s minimum. That’s where foreclosures are first introduced to the general public, at the auction. But don’t go unprepared. Here’s what you can expect at a foreclosure auction.

First, know what you’re bidding on. Before the auction is held, you can get a list of the foreclosed homes. Visit the neighborhood and the foreclosed home personally to get a feel for the area. If one of the homes interests you, contact your real estate agent to find out what similar properties will sell for in case you want to flip or what market rents are in the instance of a long term hold.

At the auction, keep cool. Remember that the auctioneer’s job is to make you spend more than you originally planned to do. If you go over your bid, your flip might turn out to be a flop. But if you are the successful bidder, be prepared to pay cash at the auction or pay a cash deposit on the property, typically 10 percent of the winning bid and provide the remaining balance within 30 days. That means your financing should be lined up before the auction.

When there several properties up for auction that appear to have a sizable amount of equity, expect more competition. And with more competitors comes more excitement. Keep your cool and keep to your budget for a successful auction. You don’t want any regrets later on down the road.