This is not about deals through an auction house, where you would have to notarize the purchase with a sale contract, but about acquiring real estate through an auction in court, which does not require notarization. As soon as the judge accepts the maximum price, the buyer becomes the owner, unless the bank rejects the bid.
Through an auction, you can acquire a wide variety of real estate: houses and apartments, building plots and commercial plots, offices and apartment buildings, shops and other commercial property. Moreover, properties of a broad price range, including high-end ones, can be put up for auction.
Attending real estate auctions can also bring an unpleasant surprise that you need to be prepared for. For example, it is often not indicated that the premises need renovation. However, most often after purchasing real estate on the secondary market, renovation is initially planned. And the savings on the purchase itself only provide more opportunities for this. Although you don't have to renovate immediately; the main thing is that the apartment has become your property, and you can improve it at any convenient time. Moreover, sometimes real estate is sold in excellent condition or already has tenants who have lived in it for a long time and are satisfied with the conditions.
Properties put up for auction should be studied in advance. Information about them appears well beforehand, allowing you to estimate the cost and possible additional expenses. The main information is the data from the appraisal conducted by an independent state expert appointed by the court. It is he who assesses the condition of the property at the time of sale, and he can also take into account the market situation and make additional discounts.
If desired, you can inspect the property yourself. But often the property is only available for external inspection. While you can tell something from the exterior of the house, you cannot evaluate an apartment in this way. You will only be able to estimate the cost per square meter.
Some companies that help with transactions in Germany, thanks to their long-established connections and broad capabilities, provide the opportunity to get detailed advice from a manager, and sometimes even see the lots being auctioned before the auction. This approach gives the buyer more information to make a truly correct decision.
To participate in the auction, you must register. You can register either yourself or a representative as a participant in the auction. To confirm the seriousness of your intentions, you must transfer at least 10% of the appraised value of the selected property to the account of the district court conducting the sale. The payment must be made from the buyer's personal account, specifically the person in whose name the property will be registered by the court if the auction is successful. If the property is not purchased, the funds are automatically returned to the original account.
The starting price is very attractive. Often the appraised value itself is somewhat lower than the market value (up to 10-20%). Additionally, at the first hearing, the minimum price is only 70% of the appraised value, and if the lot is not sold, at the second hearing the starting price will be 50% of the appraised value. In reality, during the auction, purchases occur at 10-20% below market value.
It is advisable to have a qualified specialist nearby who knows various legal nuances. Then you will be provided with competent advice, support on various issues, and timely recommendations for optimizing expenses and achieving the most profitable results. The strategy for large transactions should be effective but also safe, which experienced specialists always take into account.
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