The best strategy for successful bids in foreclosure auctions

In Switzerland, two hearts beat faster at every foreclosure auction: that of bargain hunters and that of experienced investors. The former rely on chance, while the latter depend on strategy. This guide consolidates best practices from legal experience, psychological auction studies, and financing know-how. The aim: not only to bid but to win, with a result that perfectly balances cash flow, risk, and tax burden.

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1 Preparation is 80% of Success

1.1 Collecting and Evaluating Data

1. Download the auction catalog: includes estimated value, burdens, easements.
2. Order land register excerpt: check the ranking of mortgages, easement rights, building prohibitions.
3. Compare appraisals (official + personal): deviations > 15% = negotiation opportunity with the bank.

1.2 Securing Financial Logistics

• Bank appointments before the auction: secure written bridging financing & mortgage offer.
• Provide collateral (10% of the estimated value) in cash/secured loan, no pension fund resources!

“The most successful bidders do not show up randomly with a checkbook, they have calculated three weeks worth of scenarios.”

2 Tactical Bidding: Psychology & Timing

2.1 "Rule of Three," the 3-Phase Method

Phase	Timing	Action	Purpose
Opening	from the first call	No bid, monitor the temperature	Market analysis
Mid-Game	at approximately 80% of your target price	Active entry with jump bid (e.g., +2% over current highest bid)	Signal: “I mean business”
End-Game	last call + 5 seconds	Decisive increase, exactly your maximum price	Prevents bidding automatism

2.2 Proper Use of Jump Bids

A jump bid skips the usual bidding increments (e.g., 10,000 CHF instead of 2,000 CHF). Use it when:

• You have only one serious competitor
• Your limit is ≤ 10% above the current round
• You want to “shock” the audience to eliminate small investors from the race

2.3 Don't Underestimate Body Language

✓ Upright posture, eye contact with the auctioneer
✓ Calm notebook instead of smartphone, signals planning
✕ Whispering with the bank advisor after each call

3 Your Price Limit: The 70-30 Formula

The following calculation has proven effective:

Estimated value        × 0.70  = Target hammer price
Additional costs       × 1.05  = Effective purchase price
Renovation buffer      × 1.15  = Total investment
Total investment       ≤ Market value × 0.85

This way, even with a conservative resale estimate, you maintain a 15% safety net.

3.1 Bank in “Live Mode”

• Set up a phone hotline for credit processing
• Send auction protocol directly to the bank via email
• Carry an authorized power of attorney

4 Scan the Competition, Information is Power

Three Signs of Professional Bidders in the Room

1. Binocular check on building plans
2. Laptop with due diligence tool
3. Delegates instead of owners present

Do you encounter several professionals? Then no price wars, stick to your limit and consider a “Lose-to-Win” approach: During the second call (7-12 months later), the number of bidders often drops drastically.

5 Common Mistakes, and How to Avoid Them

• Emotions > Excel: Never buy because “time is running out.”
• Too Late First Bid: Those who only appear in the end-game will be labeled as “budget-less.”
• Overlooking burdens: Easement rights & encumbrances can halve returns.

6 Case Study: Sarah's Quiet Victory

Sarah defines a limit of 740,000 CHF for a 4-room condominium in Lucerne (with an estimated market price of 870,000 CHF). In the mid-game, she places a jump bid of 690,000 CHF, and two bidders drop out. End-game: a competing professional raises to 710,000 CHF, and Sarah counters with her final number of 730,000 CHF. The bid is awarded! Total investment including additional costs and 800 CHF notary fee: 757,000 CHF. Market value in 2025: 885,000 CHF, approximately 14% return with immediate resale, > 4% net cash flow as rental income.

7 Quick Checklist for the Auction Hall

1. Calculate limit using the 70-30 formula & mentally fix it.
2. Prepare guarantee + ID + power of attorney.
3. Auction protocol/pen, no smartphone (distraction).
4. Predefine jump bid threshold.
5. Activate bank hotline & scan app for documents.
6. Immediately book an appointment with notary & bank after winning the bid.

8 FAQ

Are online bids just as effective?

Online participation (depending on the canton) offers comfort, but less psychological presence. Use it only if you cannot reach the auction hall.

Can I signal that I am dropping out by crossing my arms?

Yes, but overly obvious gestures reveal your limit. Better: remain neutral, note down legally correct.

What if an appeal procedure threatens after the auction?

Transfer the purchase price only after the 10-day period has expired (Art. 134 ff. SchKG) and check for appeal insurance.

9 Conclusion: Strategy Beats Luck

Successful bids in Swiss foreclosures are based on facts, financing, and focus. Those who combine the 70-30 formula, the three-phase tactic, and a coldly calculated price limit rarely come away empty-handed, and even more rarely find themselves in the red. Plan, review, bid decisively, and the hammer strike will mark the start of your next return story.