After detailed research and extensive preparation, the day of the auction has now come. But before you go to court, you should check again in the morning whether the appointment is taking place as planned. Appointments can also be canceled at short notice. You can find out more about this in our article “Where is my appointment?”.
In order to save you time, nerves and unnecessary trips, we will inform you immediately if we receive an appointment cancellation. Therefore, look on the object page and pay attention to the following note: "This appointment has been cancelled." You don't see a notice on our site? Perfect! Then nothing should stand in the way of the auction and you can confidently make your way to court.
After passing through all the security checkpoints in the court, you will come to the courtroom. There is a special feature there: Due to the still prevailing corona pandemic, each court takes individual precautions and some district courts only allow bidders into the room who have either previously deposited a security deposit or can show an equivalent. More on this in the article “Bid time”. There is free choice of seats in the courtroom and the hearing begins punctually at the previously announced time.
What information is disclosed in the notice?
The chief magistrate calls the auction item at the beginning. He will then determine which parties have appeared on the spot in the courtroom and whether there are other parties. It is not uncommon for several months to elapse between the preparation of the expert opinion and publication and the actual procedure. In the meantime, it can happen that new creditors register rights and then appear in court afterwards because they also want to exercise their rights.
The following information will be announced as part of the announcement:
- Information about the property
- Creditors in the process and their claims
- The date of the first confiscation
- The market value determined for the property
- All registrations that have already taken place
The registrations and the claims of the creditors are particularly interesting, as they also give you information about where the financial pain threshold of the creditors lies.
Tip: Once the announcement is made, things get really exciting! Here you will learn many details about the object and the procedure. The determination of the lowest bid is of particular interest, since the various demands are usually explained in detail again here. Persistent rights are also discussed. So you should be extra careful here.
The determination of the lowest bid and the auction conditions
After the announcement, the lowest bid is determined and the auction conditions are announced. Eligible creditors still have the opportunity to register claims with priority up to the start of the bidding period. Here, for example, a debtor can register a land charge that previously existed against him personally. This is then included in the principle of assumption of debt by the purchaser.
Within the framework of the legal regulations, the following points must be read out in order to determine the auction conditions:
1. Surviving Rights:
All surviving rights must be identified within the framework of the lowest bid with precise description.
2. Excluded items:
It is not uncommon for the properties to be auctioned to be occupied, often by third-party tenants. These tenants can then prove their ownership in advance and exclude it from the auction. This includes, for example, fitted kitchens if they are not owned by the debtor.
If such applications are not made, no items are excluded from the auction.
3. Payment and interest obligations of the purchaser:
The cash bid is subject to interest of 4% from the knockdown. You can find out more about this in the article "Lowest Bid". This obligation to pay interest applies until the distribution date, on which the total amount must be paid anyway.
4% interest is a lot! With a market value of €300,000 and an average period of 6 weeks between the auction date and the distribution date, this results in an interest charge of around €1,500. You can avoid this unnecessary interest burden by depositing your cash bid in favor of the court cashier. This means that the sooner you pay the entire purchase price, the less interest you have to pay. It is essential to secure financing in advance. You are welcome to contact our partner or look around directly on our financing page. There we will tell you how you can get a loan the safest way.
4. Obligation to bear the costs of the surcharge
You must bear the costs of the surcharge. For more information, see the Cost of a Surcharge article.
5. The disclaimer:
Does the property look different than the appraiser described? In the case of a foreclosure auction, you have no warranty rights, ie even if the appraiser has overlooked gross defects, liability on his part is hardly attainable. Also read our article "Apples instead of pears! What the appraiser is liable for". You accept the property as you find it. You should therefore make extensive preparations in advance. We can advise you on this.
6. Passing of risk
From the time you accept the bid, all risks are on your side. This means that you have to take care of all matters relating to the property from this point on. You can find out more about this in the article "I am the owner".
Notes for prospective bidders
Before the bidding period begins, there are also some notes for prospective bidders as part of the announcement. Among other things, the following points are addressed:
1. When and how do you have to identify yourself?
As soon as you place a bid, you must present an official ID.
2. Can you bid on behalf of a third person?
For this you have to present a power of attorney or a proper proof of representation. You can find out more about this in the "Documents checklist" article.
3. When do you have to provide a security deposit?
As soon as you place a bid, the creditor can ask for a security deposit.
4. When is the real estate transfer tax due and how high is it?
With the successful purchase of the property, the real estate transfer tax is due. You should take this into account from the start. Depending on the federal state, this is between 3.5% and 6.5% of the purchase price, which is made up of the highest bid and the value of the remaining rights.
5. Does a specific requirement have to be met for entry in the land register?
For entry in the land register, you must submit a clearance certificate from the tax office.
6. What about the rent security that was paid to the old owner by the tenant of my property?
If the tenant of your desired property has paid a security deposit, also known as a deposit, to the old owner, you will have to pay it back to him after the end of the tenancy. Even if you never received it from the old owner. You should therefore also take this into account when considering the maximum bid. Also read "3...2...1... The object is yours - calculate the highest bid and develop a bidding strategy".
