Buy a house or apartment at a house auction or exclusion from the subject – you have that opportunity as a potential buyer of the property. Experts estimate that this could save between 10 and 30 percent of the normal market price. In order for a house auction to be successful, you should be familiar with the procedures in advance.
Find properties from foreclosures
Items ready for auction, as well as auction dates, can be found in real estate sections of daily newspapers, on various Internet portals, in shop windows and on local court websites. You can often get the first image of the desired object online.
Check the auction file
See the auction file with your local court. It contains an estimate of the floor plan and photographs of the property. In addition, the auctioned bank often has additional information and sends a copy of the report upon request. It quantifies the market value and describes the structural situation. If the file does not show whether the appraiser saw the house from the inside, inquire. Because tenants and owners are not required to authorize entry.
Visit the facility
If you get access, you can inspect the property with an architect, civil engineer or expert to get an impression of the value of the property and identify any damage. The creditor bank helps you schedule an appointment. Your risk if you can’t preview the property: Susanne B. from Munich she bought a five-room semi-detached house – but the property was not cheap. Reason: The owner moved out only after the eviction, four months after the auction. Additional costs were incurred because the interior was demolished and the built-in kitchen was removed. Important to know: If you subsequently discover defects, you have no warranty.
Look in the land book
A review of the excerpt from the land register (court file) clarifies the burden of the mortgage and land tax, permanent housing claims or travel rights for third parties. If you want to buy an apartment, ask if construction work is in progress and how high the reserve for building maintenance is. Be sure to look at the declaration of division and the order of the community.
Your rights as a customer
For an additional fee, you become the owner of the property and you must insure it immediately. However, you usually cannot dispose of them freely. So plan for a longer phase of transition. If the previous owner or his tenant refuses to leave the property, a special lawyer will help you set appropriate deadlines, give notice of termination and, if necessary, conduct an approval process.
In the case of a forced auction, ten percent of the purchase price must be deposited when the bid is placed.
House auction financing
To get a contract from the court and become the owner of
the property, you should clarify the financing before the auction. Proceed as follows: Ask the creditor bank for a “pain limit” – this is the minimum amount that must be offered. Check funding in advance with your Sparkasse or LBS. Payment is usually made four to six weeks after the auction date.
Buy real estate
Bidders in a forced auction have at least 30 minutes to submit their bids. If no one wins the contract, a repetition of the term is scheduled. At the first appointment, the bid must reach at least 50 percent of the market value.
Creditors are entitled to the first date of opposition if at least 70 percent of the market value is not offered. There are often no restrictions in the second and subsequent appointments.
Early contact with the creditor is recommended to avoid interruptions during the auction.
With the highest bid, you have a good chance of getting a bid. The bidder immediately pays the property ten percent of the market value if the creditor requests it – usually in the form of a bank guarantee or a cross-check issued by the bank. Transfer is also possible: In this case, the amount must be transferred to the account of the competent court on the day of the auction and proof of this must be available. He acts as a trustee and returns the money if the property auction was not successful.
Registration in the land register
For an additional fee, you become the owner of the property. Registration in the land register is done as soon as you transfer the real estate transfer tax and the distribution date occurs.
You also pay an entry in the land register and – instead of a notary fee for the sales contract – an additional fee to the court.
Forced auction procedure at first glance
1. Find the appropriate object
2. See the auction file with the local court
3. If possible, inspect the object in advance
4. Secure funding
5. Visit other auctions to gain experience
6. Use the shutdown date
7. Make an offer
8. The offer is below 50 percent of the market value: No surcharge; The offer is more than 50 percent of the market value: the bank’s representatives agree to the demolition
9. If necessary, a second meeting if the property was not sold at the first forced auction
10. Acquisition of property at an additional cost
11. Payment of ten percent of the market value as security
12. Remaining payment by the date of distribution (four to eight weeks after the forced auction)
Source: Argetra / German Rechtspfleger Association
Experts estimate that if you buy a house through foreclosure, you save 10 to 30 percent.Photo: Fotolia / egeneralk
Cost comparison: regular home purchase exclusion
Margaret M. bought a detached family house with a garden and a garage at a forced auction in Duren. The property is 539 square meters and the living space is 180 square meters. The sworn expert set the market value at 220,000 euros. Margaret M. bought the property for 170,000 euros.
Auction house costs
|Amount in euros
|Market value: 220,000 euros, of which the price of climbing
|There are no brokerage fees
|Real estate transfer tax 3, 5%, calculated from the rising price
|An officially appointed expert is paid by the district court
|Supplement and transfer to court
|177,190 th most common
The cost of buying a house
|Amount in euros
|Forwarding: 5, 8% of the purchase price
|Notary fees and land books: 1, 5%
|Real estate transfer tax: 3, 5%
|Estimate report about 2% of the purchase price
|4,500 th most common
|Total redemption price
Taking into account the most important additional costs, the difference in prices is 71,710 euros in relation to the purchase. Savings: almost 30 percent. The auction therefore offers two main advantages over the purchase:
First, save the broker’s commission and the costs of the notary incurred when buying the house.
Forced property auction: the most common problems and risks
At the obligatory auction, the bidders buy a pig as a gift, because before the house auction, they do not have the legal right to see the property from the inside.
If you have been awarded a contract and there are defects, you cannot apply for a guarantee before a court, expert or previous owner.
Therefore, make sure that the market value decision and expert opinion are realistic. You should pay special attention to the date of evaluation: how long ago?
Otherwise, you risk that the market value estimated in the valuation is excessive and that the lease cannot be achieved.
If you want to buy a condominium, contact the VEG administrator. Are expensive construction measures
planned soon and how high is the maintenance reserve?
Are there one or more co-owners who are in financial difficulties and cannot pay housing assistance? Other risks always remain, but the favorable price attracts.
Nine tips for a successful house auction
With the highest bid in foreclosure, you have a good chance of getting a bid from the court.
1. Auction file See the auction file in court.
2. Land Registry Insight
The auction file usually contains an excerpt from the land registry. This shows how much the property is financially burdened.
3. Property management
In the case of residential or partial ownership, ask the property management if there are any remnants of the housing allowance and to what extent.
4. Overview of the subject is
usually only possible from the outside. It is advisable to take an expert with you and look at the market value report in court.
Ten percent of the purchase price must be paid in cash or with a check confirmed by the bank when submitting the offer. The rest of the payment is usually made a few weeks later. Clarify financing to your bank in advance.
6. Gaining experience
Visit some auction dates in advance as a spectator to keep nervous when it comes to your dream home.
Sometimes a meeting is canceled shortly before the auction. Check with your local court shortly before the meeting is still available or an alternative setting has been scheduled. It can be useful to follow the fate of the property, it is often excluded later – with less competition.
8. Price limit
It is enough if you make your offer in the last few minutes. Beware of an angry offer. Determine from the beginning the maximum amount for which you want to make a bid – and strictly adhere to it.
If the debtor himself lives in the property, exercise your special right to termination after the surcharge, and it may be necessary to vacate the property. You cancel the tenants under certain conditions due to your own needs.