Info and experiences with 'Zwangsversteigerung'

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A question about the Zwangsversteigerung. There is a house near us we are interested in and we have been working with the bank to understand the Zwangsversteigerung process. One thing they recommended is that we get a lawyer because the couple that were the previous owners (and went bankrupt, or comparable), weren't cooperating with the bank and likely won't leave amicably.

 

We are checking with our broker to see if our Rechtsversicherung would cover this situation. Does anyone know what it might take to evict the couple that is in the house? Especially important is how long it could take, but also what is the process.

 

Thanks!

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Nasty stuff. If the auction goes through they have to leave. How long it takes, and what rights they have are good questions. Could even be that they are working with other banks to hold on to the property. There is a case near us now. Nasty, nasty stuff.

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Remember too that if the bank is forcing the auction they are only interested in recovering the money they have lent. If they have loaned 200k€ on a house that sells for 300k€ then although the purchaser becomes legal owner of the house, the old owners get a financial windfall of 100k€ with which they can fight future legal action. This is not usually the case, however - most forced auctions result in the bank not recovering their debt (or at least debt plus accumulated costs, which may include many months of unpaid interest).

 

Rechtsschutzversicherung is unlikely to help you as many such risks in purchasing a new property are particularly excluded (§ 3 Abs. 1 lit. d ARB)

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with which they can fight future legal action

So, what would the legal fight be? What kind of legal basis or precedence is there? Is there a chance that they could become long-term squatters? (I'm assuming yes, I just wonder how long it might take to get them out.) Do they have any legal rights in this situation?

 

Okay, all questions. I would think that they have some rights, and that there is likely some time required to officially evict them so that they can take all property that is "there's" with them. I just want to get an idea of how long that might be and what they can do to stall.

 

Thanks!!

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You can find a lot on the web about similar cases, for example http://www.gutefrage.net/frage/ehemaliger-besitzer-raeumt-nach-zweimaliger-frist-nicht and http://www.gutefrage.net/frage/haus-zwangsversteigert---glaeubiger-will-nicht-raeumen

 

However, no concrete info on how long they can stall. You can try to get them evicted and it will cost you a bunch of money. They can destroy the house and / or try to stall.

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I thought I would post an update. We met with lawyers today and the immediate advise was "unless you have your hearts set on the house, lay off". Basically, it can go OK, or it can go badly... sometimes very badly. There are experiences of people basically trashing the house before leaving.

 

What is our situation? We are in small town area, and the house for 'judicial sale' is in the neighbouring village, which would mean the kids would not have to change schools - a distinct benefit. Houses in our village don't move very often, and usually are a private sale. In the past year we have seen less than five for sale, and none that fit our family (4 kids... enough said).

 

The house in question was valued at over €400k and is in the second round, so bidding starts just over €200k. The couple that owns the house, we were told by friends in the village, got divorced, but at least one is still living there. They haven't been cooperating with the bank, and now the bank wants the money. The valuation of the house was done in October 2010, so things have been underway for a while.

 

What did the lawyers say:

 

  • We cannot offer to purchase the house privately - it is now in the 'Judicial Auction' process
  • We can talk to the owners and make a deal about moving out timeframes, but if they don't keep their side of the agreement, then we are back to evicting them
  • We may have to pay additional costs to a moving company to take the stuff away, if evicting (€2000 +)
  • The lawyers fee currently is hourly
  • If moving to eviction, lawyer fees might flip to the 'Gesetzlich' based on a percentage of a deemed rental rate for the house

 

 

Our next steps are (if all goes well), a tour of the house with the bank. They want to take a look at the house again and have offered to have us join, if time/schedules permit.

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To be allowed to bid you need to put up 10% on the day in cash or bankers draft. Once deal is done you get normally up to 2 months to pay.

 

Update... The law changed and you still need the 10% but it can't be in cash. Apparently there was a situation that a number (10+) of people were bidding on a €1 Million house, and someone came in and stole all the bags of cash sitting there. So bankers draft, trust account with a (bank? lawyer? notar?... I forgot which), or the like is needed. This requirement can be waived by the seller (aka: Bank) on prior agreement.

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We bought a property 2 years ago that was set for a Zwangsversteigerung.

 

But - we put in an offer, which was accepted by the previous owner prior to the auction taking place. The property was taken off the auction list at the last minute (either the day before or maybe even on the day). Perhaps it's a different story if you want to settle with the bank instead of the owners.

 

We gave the previous owners 3 months to move out, and only had to pay the debts on the property straight away. We held onto the balance of the money until the owners moved out, and then paid them.

 

However, when we were at the notar finalising the sale, we built a penalty into the contract, that meant for every month they didn't leave, we had to pay them less. In our case, it took them 9 months to leave, so we got 6 months worth of penalty payments deducted. If this is in the contract, then even if you have to go through an eviction process, this amount should more than cover the cost of this process. There are probably other options on how you can do this, but it'd be best to speak to the notary about it.

 

I guess a lot would depend on how much of the house is paid off. If the auction brings in more money than what is owed to the bank, then the current owners receive the balance of the sum paid, and then it would be possible to withhold this sum until they move, and build in a penalty. If all the money from the sale is going to the bank, then I'm guessing you have to pay the full amount straight away and are at the mercy of the current owners.

 

Do you know what the financial situation is there?

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Oh and maybe you can take photos and add something into the contract about handing over in a similar state - again with penalties built in, to make sure they don't trash the place.

 

This wasn't a concern for us, because the place was barely habitable and we demolished it anyway.

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We got the house!!!

(and the mortgage :blink: )

 

We spent a lot of time with the bank. They were open about their situation and told us the minimum they were prepared to take (about 55% of the deemed value). Via the village rumour mill, we heard about potential heating and building quality issues. The bank called the companies that delivered the windows and glass and the heating installer. Their investigations found the building materials were generally high-quality and there might be a €5k heating repair. There was also a minor tax amount outstanding that might carry-over to us.

 

Just a note that the bank always has the final say on whether they will accept the final bid offered, or try again in a few months (if under 75% of the valuation price - see earlier in this thread).

 

Yesterday we went to the auction. The judge, two from the bank, and three 'interested' parties showed up (including us). A play-by-play:

 

> Judge described the property with a detailed summary.

> Judge listed the debts to be purged from the proceeds.

> Judge asks whether the owners are present (no), or other debtors (no).

> Judge explained how the auction will work.

> Judge opened the bidding, stating the minimum legal bid (was about €10k) and the minimum that the bank can legally accept (about €130k) - both were well below the bank's internal minimum amount.

> A new 'interested party' walks in the door.

> Judge continued talking for 5-10min on 'if you make a bid, I need an Ausweis and a bank cheque or xxx or xxx'... blah blah

> Judge stops talking, and suddenly the three other parties approach the bench for a copy of the Gutachten (valuation and description)

 

At this point my wife and I are thinking "What are these people doing here if they have never seen the building description?" The Gutachen was freely available for months by emailing the bank or any others that advertised the property online.

 

> We decide to make a bid, just to get things going, and go for 40% of asking price. Judge takes it and announces the bid to the room.

> The bank signals to the judge that they won't accept it. Judge advises the room.

> Our 'friend' at the bank pulls us aside and tells us, with the outstanding taxes and potential repairs, they'll take €10k off their 'minimum'

> We go back in the room, and put in a bid for €2k less than the bank's minimum. Judge announces the bid to the room. It's about €40k more than the last one, and there is an obvious gasp around the room.

> We see the two bankers discuss and hem and haw and finally a terse nod agreeing that we would be okay.

> Judge announces 2 minutes left in bidding.

> A couple behind us whispers hurriedly, and approaches the judge. Judge announces a bid €500k higher.

> We bid it up €500k.

> Said couple whispers and decline to bid.

> Judge asks for final bids. Silence. Announces 'Going Once. Going Twice. Going...'

> The man from the couple behind interrupts the judge and announces a bid €1500 higher (rounding nicely to a €10k mark)

> Judge announces the new bid.

> We go up another €500k.

> The couple behind us ask for a couple of moments to discuss.

> Judge asks for final bids, with a somewhat sour look at the couple behind us. Both in the couple say 'Nein'.

> Judge closes bidding with 'Going Once. Going Twice. Going Three Times.'

> Judge advises that we are the proud owners of the object, with all rights and responsiblities.

 

After things finalized, we see one of the 'interested parties' discussing with one of the bankers. Apparently she wanted to know if the bank would have helped her finance the purchase. The banker laughed. A word to the wise, arrange financing before committing to buy!!

 

We discuss with the judge and the bank som details - insurance, wiring payment to the bank and Justice office, etc. There is no English copy of the procedures.

 

Next steps in our saga are:

> Financing

> Getting the lawyer to draft the Räumungstitel (eviction notice)

> Meet with the owner - hopefully his move out will be orderly

 

I'll post any updates of any official procedures that occur, in case it helps the next person.

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> We bid it up €500k.

...

> We go up another €500k.

 

You raised the bid half a million each time? Wow.

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Oops! :lol: €500 each time. Only wish I had a half-million to spare!

 

(switching between work and TT can do that to a guy)

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hi..

 

ale3982, any update on your house? did you already move into your new house?

 

I'm thinking of buying a house also via "Zwangsversteigerung", but still wait and see, cause some people have a bad experience on this one...

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densss,

 

Well, we are still in the middle. We got the house, paid the fees to the Justizamt (about 800 Euro - based on the value of the house), notar fees (about 1000 Euro), got insurance, and got the mortgage signed last week.

 

We had the option of evicting the previous owner immediately, but after talking to him we agreed to let him stay until the end of February. We have to pack up, buy appliances, buy a kitchen, etc. So we weren't moving in immediately and we *think* (hope?) that he is trustworthy enough.

 

I think we were pretty lucky and the gentleman who previously owned the house is resigned to the fact that he lost his house.

 

I'll update things more in March when we finally move in. I'm concerned about things like utilities and making sure we don't take on his bills for the usage of them.

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This is a really interesting thread. Please do come back and give a final summation, even if there's been no activity in this thread since.

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Wow, interesting story. We nearly bid on a place once, I was freaked out walking around with a banker's draft worth tens of thousands for a few days. In the end someone snuck in and offered the owners cash, so we never got to experience the thrill of the auction.

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I'm also a bit interested to hear how your experience goes. We're a young married couple looking for a run down old house, it could well be through a Zwangsversteigerung process. Good luck!

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[adminmerge][/adminmerge]

 

I know it's a touchy subject at times, but I'd really like to get some first hand knowledge on purchasing foreclosure property in Germany, particularly in Leipzig. My wife and I could never afford 'regular' prices, and this would be something that would hugely suit our situation.

 

Now, I know there are pitfalls, I know there are risks, etc - but it's something I want to seriously look in to.

Has anybody got some specific advice, suggestions as to how to go about this? I'd feel more comfortable with some kind of assistance, and figure it'd be worth paying for ... a specialized lawyer or agency, for example? Do certain estate agencies actually specialize in this kind of thing? Are they reliable/trustworthy/competent?

 

Thanks!

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