Foreclosure Auction

A foreclosure auction, also known as an ‘involuntary public sale,’ is the legally required method for liquidating a debtor’s assets to satisfy a creditor’s outstanding claim. In a foreclosure auction, bidding is conducted on behalf of a creditor. If someone fails to pay their debts, the creditor has the right to enforce their claim against the debtor’s assets. This requires the creditor to have an enforceable title, which may be a court judgment or a notarial deed proving the payment obligation. For example, a mortgage lender can initiate a foreclosure auction. The lender has the authority to sell the mortgaged property without a court order, provided the debtor is in default. If the debtor meets their obligations (i.e., pays interest and principal on time), the lender cannot proceed with the sale. An enforceable title (e.g. issued by a bailiff), can also be utilized by a creditor who has seized the debtor’s property and wishes to initiate a foreclosure auction.

A voluntary auction takes place when the private sale of a property is expected to not find a buyer quickly, or when a higher return is anticipated from a public sale (auction). Generally, the sales method in a voluntary auction is similar to that of a foreclosure auction. The “Special Auction Conditions” specify whether it is a foreclosure or voluntary auction. In voluntary auctions, the “Special Auction Conditions” often declare that the terms established in the “General Conditions for Foreclosure Auctions” are to be applied.

The notary plays a central role in organizing and executing the auction. The notary’s duties and authority are described in our general auction conditions. The notary announces the auction and the auction conditions and informs potential bidders with comprehensive information regarding the taxes, costs, and burdens for which the prospective buyer is responsible before the bidding begins. The notary’s judgment and discretion largely determine the auction proceedings and provide further elaborate on the interpretation or application of the auction conditions.

The purchase of a property through an auction takes place under certain conditions, known as ‘auction conditions.’ These conditions outline the agreements between the seller and prospective buyer once the purchase agreement is established through the auction. This includes matters such as:

• – Cost-sharing between seller and buyer;
• – When the risk of an object transfers to the buyer;
• – Payment deadlines; and
• – The transfer of ownership.

The auction conditions are divided into “General Auction Conditions”, and “Special Auction Conditions”. General conditions are outlined in the “General Auction Conditions”, while conditions specific to a particular object are included in the “Special Auction Conditions.”

It is essential that you inform in advance about the applicable auction conditions and regularly check our website for updated a costs and properties information in the lead-up to the auction.

Interested in attending our next auction?

The following documents are required for bidding during the auction:

• – Identification document, such as a passport, driver’s license, or identity card;
• – Bank guarantee (a letter from your bank stating that the required funds are currently in your account or that you qualify for a mortgage/financing).

For more information about our (upcoming) auctions, you can contact us at auction@notarishelmeyer.com.