February 3, 2025
Foreclosed real estate is an attractive way to buy a house or apartment below the market price. But before you get involved, you should understand the process and its specifics in detail. In this article, you'll learn step by step how to find real estate from foreclosure sales, what to look out for and what pitfalls can lurk.
A foreclosure auction is a legal process in which a property is forcibly sold in order to satisfy the claims of creditors (e.g. banks). This often happens when the owner is no longer able to pay off their mortgage debts. The procedure is initiated by the competent enforcement or bankruptcy office and follows
legal requirements.Foreclosures often offer low prices — but there are risks that you should be aware of.
Not every property is sold far below market value, but good opportunities often arise. The main reasons for this are:
In many cases, real estate is auctioned off at 10-30% lower than its regular market value. However, the final price depends heavily on location, condition and demand.
Foreclosures are not marketed centrally via real estate platforms, but are published via the following sources:
Here is an overview of the most important steps of an auction:
Step | description |
---|---|
1. Gather information | View the report, market value and auction date. |
2. Check object | If possible, visit on site or talk to neighbors. |
3. Clarify financing | Coordinate credit limits with the bank, as 10% security is required. |
4. auction date | Show up with a valid ID and security deposit. |
5. Bidding process | Bids are submitted within a fixed period of time. |
6. supplement | The highest bidder is awarded the contract under certain conditions. |
7. Transfer of ownership | After payment of the purchase price, the land register entry is made. |
The court report includes important details such as:
Since visits are often not possible, the report should be analysed in detail and, if necessary, an expert should be consulted.
Most auctions require a security deposit of 10% of the market value. This can be deposited by bank guarantee or check.
Important: After the bid, the purchase price must be paid within a fixed period of time.
Set yourself a clear budget — emotional bidding matches can be expensive.
Foreclosures offer opportunities but require thorough preparation. Anyone who knows the process, analyses the report and has a solid financing strategy can make a good deal.
Remember: A low purchase price alone does not make a good deal — location, condition and follow-up costs are decisive.