house for sale for 11k by bankruptcy lawyer, is it legitimate?

74 posts in this topic

Hi,

I'm about to sign a contract for a house purchase and I need advice as I'm a little scared, confused and clueless.

I found the house for sale on immobilienscout24, the price is very low in the region of €11000 and is being marketed by makler of a national bank (e.g. sparkasse) + a high commision, more than half of the price.
I viewed the house and thought the reason for the low price could be because the house is not in good condition and it is not close to any major city. Although a train station and supermarkets are in the town.

When I asked for an English speaking Notar for the purchase, the makler told me prefers a different Notar that he uses who has experience in bankruptcy insolvenicies.

When I read the draft contract, I saw that it was being sold by an insolvency lawyer on behalf of the owner who bought it originally in 2013 and the insolvency started in 2017.


I have never bought a property in Germany and never bought a property that is being sold because of bankruptcy.

 

My question is, does this sound legitimate? What kind of fraud could be in such a deal that I need to watch out for?

 

Are maklers of national banks trustworthy? I feel somewhat safer dealing with them when they are bearing the name of a national bank.

 

Who can I go to for competent and honest advice regarding such a purchase? becuase I don't want to waste money and time with random solicitors to find out at the end that they don't have enough experience on this matter to find all the pitfalls.

 

Thank you so much for reading, any advice will be highly apprecited !

 

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I don't think any Makler could be described as "trustworthy".  There are no qualifications nor licensing involved, and their primary interest is to sell the place - I would not even go so far as to say they represent the seller!  They represent themselves, primarily.  I hope there are some good ones out there, but I would err on the side of cynicism and not take anything they tell me for granted as "true" 

 

a 50% plus commission is pretty insane.  I would proceed with the utmost caution.  It sounds really sketchy. 

 

Have you had it inspected to discover what the costs would be to make it habitable?  

 

ETA:  you might be better off looking for a piece of land instead.  It could cost more to rehab an old dilapidated building than it might if you started from scratch.  Your options would be more flexible, too.  eg you could start with a small house and build it out or whatever.

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1 hour ago, SpiderPig said:

PM me the link and I will take a look... 

 

Because you're a lawyer.😉

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This thread should help you understand what the role of the notary is here, which is very different to the UK for example.

You would be very ill advised to sign a contract on the advice of a Makler getting 50% commission supported by his pet lawyer. You as the buyer have the greater say in the choice of Notar. It would not be a waste of time and money to search for an English speaking lawyer or Notar to advise you independently, and may save you a packet of future heartache. If you are being pressured to complete, run.

 

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Regardless of any potential trust issues with the real estate agent or selection of the notary, this is the part of your post that got my alarm bells ringing:

 

11 hours ago, NoahBerlin said:

I viewed the house and thought the reason for the low price could be because the house is not in good condition and it is not close to any major city.

 

Did you view the house or did you inspect the house? You say yourself it was obviously "not in good condition", but are you aware of what that might entail? Was it built or extensively renovated during East German times and has not been touched since? It could have extensive damage and/or decay to any number of vital systems (electricity, heating, water, sewage) that will require expensive repairs and renovations to make it livable. We're talking way more than some new wallpaper and a fresh coat of paint. Does the place even have central heating, if that's important to you? Because many former East German properties don't.

 

Before you sign anything, I strongly suggest you spend a few hundred euros on a Gutachter, who can inspect the house and give you a ballpark figure of what it will cost to retrofit everything to modern standards. If it's like some of the houses I've seen in the former GDR, you're likely to get into six figures, so act wisely before you end up in the starring role in a remake of "The Money Pit".

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7 minutes ago, El Jeffo said:

Does the place even have central heating, if that's important to you? Because many former East German properties don't.

 

Before you sign anything, I strongly suggest you spend a few hundred euros on a Gutachter, 

 

Most deffinately!!!

 

 

So, I have seen the limmited info that the Makler has put on-line and must say.. "Wow, thats a lot of building for 10 grand"..  But its also a huge money pit if its to be brought upto a decent living standard.. 

 

However, it could also be a perfect place for some single guy to move in... pop an automated pellet ofen in the corner and then open up the Groundloor for  "Public fundings"... ( The OP will know what I mean.. )

 

My personal thoughts as a mid 50 yr old bloke... Think twice... then think again... :huh:

 

 

 

 

 

 

 

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Adding to what Jeffo said, asbestos removal is very expensive. You don't want to breathe in ANY of it and the removers have to wear a lot of gear and take a lot of precautions. (I used to do it.)

 

I don't know if it exists in your property but a Gutachter will tell you.

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Just make sure you are buying the land (Ground) as well along with the constructed house. I had an experience wherein the house was on sale for similar price but the land belonged to Stadt and the contract for land was about to expire in 6 months. Post 6 months I was suppose to either buy the land with a big amount which Stadt decides later or lease again for 3 years with pretty much of a good amount monthly for the land as lease amount.

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Oh jeh. Naive foreigner buys old pile for a song. Makler rubs hands together in glee. There is no such thing as a free dinner. Quote from my Grandad. Who is long dead. Apart from the fact that it is an insolvency. Vultures come to mind. Yeah, somebody else will buy it if the OP doesn't. Sure. Smells bad from my armchair though. Can't help wondering why it is not up for auction.

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1 hour ago, optimista said:

Can't help wondering why it is not up for auction

 

Its a dump in the middle of nowhere that has an estimated value not far off that you would expect for a used car.  It clearly has no realistic chance of ever being sold at any price. 

 

1 hour ago, optimista said:

Yeah, somebody else will buy it if the OP doesn't.

 

I wouldnt count on it, there are large areas of germany where property is essentially unsellable, and as other people have suggested the building probably has negative value (ie the land would be more useful for construction without it).  

 

 

I know a few people who have bought similar "bargains", most notably a "farmhouse" in spain, up a mountain with no water or electric or anything which was on the market more or less forever and eventually turned into an albatross for my friend who poured money into it for a few years before abandoning it with a loss of a couple of tens of thousands and a good chunk of his sanity.

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Is it permitted to tear down the building and rebuild? Put on a prefab low cost house?

Are there local laws regulating the size or style of permitted buildings? (Lots of those in Bavaria, where everything in the countryside is forced to be either a sterile bungalow or a nauseatingly tacky imitation farmhouse.)

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57 minutes ago, Metall said:

(Lots of those in Bavaria, where everything in the countryside is forced to be either a sterile bungalow or a nauseatingly tacky imitation farmhouse.)

Now who's being a negative Nancy?

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Thank you everyone for the advice. I really appreciate it.

My concern is not the buildings condition. it doesn't matter how bad it is to me.

I'm more concerned about other problems like darsvedar mentioned or other similar tricks which I can't verify myself.

Who can I go to check these things for me? Can I trust a lawyer to carry out all of the necessary checks for me in the contract and the legal checks of the house?

The house is a terraced house. the 2 adjacent houses seem to be empty or neglected. I'm also concerned about having to repair things for others not only the house itself!

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3 hours ago, zwiebelfisch said:

there are large areas of germany where property is essentially unsellable,

True. I own a flat in a small town 60 km north of Hamburg. It was okay until 20 years ago someone bought the neighbouring building and rented it to Russian "refugees" many of who hung around drunk and littered the surroundings. A few years ago one of the other flats (2 rooms, about 55 sqm) were put on auction because the owner had become insolvent. The bank got it for € 3500.- . When I tried to sell mine I couldn´t even find a Makler who would bother to accept the mandate.

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Given the insolvency status, there may be liens attached to the property as well.  

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4 hours ago, NoahBerlin said:

Thank you everyone for the advice. I really appreciate it.

My concern is not the buildings condition. it doesn't matter how bad it is to me.

I'm more concerned about other problems like darsvedar mentioned or other similar tricks which I can't verify myself.

Who can I go to check these things for me? Can I trust a lawyer to carry out all of the necessary checks for me in the contract and the legal checks of the house?

The house is a terraced house. the 2 adjacent houses seem to be empty or neglected. I'm also concerned about having to repair things for others not only the house itself!

 

It is the job of the notar , I beleive to check to see if the property is free of debt and if there are any anomilies with the place... 

 

eg, one of my properties had it written in the contract that the local electricity company had 24/7 rights to go onto my roof if it was nessacary to do work on the overhead cables... 

 

As I was purchasing an Inherited house, the notar had to ensure there were no debts against the property and that all of the Heirs got the correct percentage... 

 

Maybe Starshollow would be willing to take a peek at the verkaufsvertrag... maybe he wont... 

 

Dont be put off... but check out the status of the land ownership etc... as I said in my PM... 

 

 

 

 

 

 

 

 

 

 

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11 hours ago, SpiderPig said:

It is the job of the notar , I beleive to check to see if the property is free of debt and if there are any anomilies with the place... 

The notary will only be able to check what´s registered in the Grundbuch. Sometimes there are third party rights not registered like customary rights of way etc. He´ll also not check whether e. g. the municipality has any plans which might affect the value of the property (like. e. g. building a refugee asylum  or a noisy road next door). Wouldn´t hurt to make your own inquiries about those things.

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