Financing an auction purchase is different from a normal property purchase, mostly because of the tight timelines.
The first outflow is the EMD, typically 10 to 25 percent of the reserve price. It has to be paid before the auction date and is refunded if you do not win. Next, the winning bidder usually pays 25 percent of the sale price within a day or two of winning, and the balance within 15 to 90 days.
Because banks take time to sanction a loan, many buyers use a mix of own funds for the EMD and short-term borrowing for the balance. Some banks offer auction-property loans once the sale is confirmed, but pre-approval is always safer.
Plan your liquidity before you bid. A winning bid becomes a liability if you cannot complete the payment on schedule.
Property Auction