Reviewing a property before a compulsory auction: appraisal, land register and hidden risks

The biggest mistake at a compulsory auction is bidding blind. You buy with no warranty, you usually cannot see the property from the inside – and your bid is still immediately binding. Your only safeguard is the documents. This article is step 3 of our beginner's guide: the four sources you should have worked through before every bid.

If you would rather have the essentials on paper next to you: the ten points before the bidding hearing are also available as a one-page checklist to print – Appraisal checklist.

1. The market value appraisal

The court sets the market value, usually on the basis of an expert appraisal (§ 74a (5) ZVG). This appraisal is your most important source of information: year of construction, condition, floor areas, deferred maintenance, defects – and often a note on whether the appraiser was even inside.

Important: the market value is an estimate, not a guaranteed value. If the appraiser could not get in, they often build in a safety discount – and the real condition may be worse (which is exactly why your bank finances cautiously, too). In our property overview we automatically analyse available, usable appraisals and show which documents are available for each property.

Five questions to work through in the document chat

Use these questions to review an appraisal yourself or ask about the available documents in ZVG Melder's document chat. For each answer, open any cited passage in the original document. A statement without supporting evidence remains unresolved.

How current are the documents? Compare the appraisal date, the valuation date and any supplements. Record which version contains each detail. Without newer documents, changes to the property since then remain unknown.
Which areas could the appraiser inspect? Check the site-visit section to see whether individual flats or the entire interior were inaccessible. An exterior photograph cannot establish the interior condition.
Which condition details were observed, and which were assumed? Find the exact passage about damp, the roof or renovations. Check whether the appraiser records a direct observation, reports someone else's statement or makes an assumption for the valuation. The absence of a reported defect does not establish that the property is free of defects.
Do the documents disagree on floor area, use or rights? Compare the relevant passages in the appraisal, supplements and other available documents. Record the source and date of both statements. An unresolved conflict about the current facts or rights that remain in place needs clarification before bidding.
Which costs have figures, and which are still unknown? For each amount, check its basis and the date it applies to. Keep supported costs and your own assumptions separate in your calculation. Unknown renovation costs remain an open question; do not silently treat them as zero.

Record your open questions on the checklist. The cost calculator calculates property transfer tax for your planned bid; add other costs separately. In the analysis example, you can select risk categories and open the document chat for the featured property from there.

If you are pre-sorting several properties, the next step is the risk-class analysis: there we explain which appraisal indicators ZVG Melder detects automatically, how heavily they are weighted and why a low class with thin data is no all-clear.

2. No warranty, no enforceable inspection

The court is not liable for defects: "A claim for warranty does not arise" (§ 56 ZVG). And you cannot enforce an interior inspection – the debtor does not have to let you in. So you buy with a residual uncertainty about the condition; factor in a buffer for surprises.

3. The land register: rights that remain in place

Not all encumbrances are extinguished by the award. Rights that remain in place under the terms of the auction (§ 52 ZVG) – such as a residence right, a usufruct or an easement in section II of the land register – you have to take on. A lifelong residence right can make a property practically unsellable. Such rights also count towards the value thresholds – so read the terms of the auction carefully.

4. Is the property occupied?

A property bought at auction is not automatically empty:

Is the debtor still living in it? The award decision is an eviction title against the possessor (§ 93 ZVG) – you can have them evicted, but that costs time and money.
Is the property let? Then the tenants stay (sale does not break a tenancy). You only have a special right of termination for the first permissible date (§ 57a ZVG) – more on this under After the award.

5. For owned flats: HOA arrears

For condominium ownership, § 10(1) no. 2 ZVG gives certain service-charge claims priority in the distribution of auction proceeds. The 5% of market value limit caps that priority. It is not a flat surcharge on your bid and does not, by itself, make you liable for historical arrears.

Still review the association's budget, accounts and resolutions. Ongoing service charges and possible special assessments are separate questions; the resolution and due date can matter. Before bidding, establish which specific payment obligations could apply to you after the award. An arrears figure in the appraisal or your co-ownership share alone does not answer that question.

In brief

Read the appraisal – condition, deferred maintenance, was the appraiser inside?
Check the land register – which rights remain in place?
Clarify the occupancy – debtor (evictable) or tenants (stay)?
Check the WEG documents: historical arrears are not an automatic extra debt; clarify ongoing service charges and special assessments separately.
No appraisal, no view inside? Plan a buffer – or steer clear.

Note: General orientation, not legal advice. What counts is the original appraisal, the land register and the court's official notice.