Foreclosures in Austria: Everything you need to know

Forced auctions often evoke the image of wild bidding wars or overwhelming risks. However, the procedure in Austria is strictly regulated, transparent, and offers well-prepared interested parties attractive opportunities to acquire real estate at significantly lower conditions than in the open market. This guide explains the entire process, from the legal foundation to strategic preparation and secure execution, providing practical tips for buyers, investors, and anyone looking to take the leap into the world of court auctions.

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1. Legal Basis and Definitions

• Execution Order (EO): The central law governing the auction process.
• Market Value: The market value determined by an independent, court-sworn expert.
• Minimum Bid: The lower limit, usually 50% of the market value, below which no award can occur.
• Deposit: A security deposit of 10% of the market value that must be provided before bidding.

2. Overview of the Auction Process

Phase	Typical Duration	Main Tasks
Opening Order	0 - 1 month	Creditor’s application, judicial seizure of the property
Expert Opinion Preparation	1 - 3 months	Site visit, valuation, publication in the edict file
Announcement & Preparation	4 - 8 weeks	Case review, property viewing, financing confirmation, strategy
Auction Date	1 day	Reading, bidding round, awarding
Payment & Land Registry	4 - 6 weeks	Remaining purchase price, fees, property registration

3. Preparation, The Key to Success

3.1 Research and Analysis

1. Check the edict file: Dates, assessments, encumbrances.
2. Obtain land register extract: Mortgages, servitudes, easements.
3. Zoning & building regulations: Identify future development opportunities.

3.2 Secure Financing

Banks generally finance up to 80% of the market value. Obtaining a written confirmation early greatly increases your security in acting.

"A watertight financing confirmation is the ticket to the courtroom, without it, you may fail despite the best bid."

3.3 Strategic Bidding

# Sample Budget Plan
Market Value            = 300,000 €
Minimum Bid (50%)      = 150,000 €
Maximum Bid            = 270,000 €
Renovation Reserve      = 20,000 €
Ancillary Costs        ≈ 5% (Taxes + Fees)
Walk-away Price        = 270,000 €

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4. Detailed Look at the Auction Date

4.1 Admission and Formalities

About 30 minutes before the start, identification and deposit will be checked. Without proof of the security deposit, participation is not possible.

4.2 Reading of Conditions

The court reads the expert report, the current encumbrance status, and the minimum bid. Now the last questions should be asked.

4.3 Bidding Round

• Starting at the minimum bid
• Bid increments in practice: 1%-5% of the market value
• Three calls without further bids → Awarding

4.4 Awarding and Payment

After the awarding resolution, court and tax fees as well as the remaining purchase price must be transferred in a timely manner. In case of payment default, the deposit will be forfeited.

5. Cost Structure and Ancillary Costs

Item	Percentage / Amount
Property Transfer Tax	3.5% of the awarding price
Registration Fee Land Registry	1.1%
Court Award Fee	1.0% - 1.5%
Attorney/Notary Fees	Individual
Financing Costs	As per bank tariff

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6. Opportunities and Risks

• Opportunities: Price advantages, transparent handling, no broker commission.
• Risks: Need for renovation, existing servitudes, payment deadlines.

7. Myths and Reality

Myth 1: Only professionals can bid

Any fully competent person with a valid ID and deposit is allowed to participate.

Myth 2: The deposit is lost if you do not win

Unsuccessful bidders receive their deposit back in full after the auction.

Myth 3: All auction properties are ruins

The quality ranges from needing renovation to nearly new, the expert report provides reliable information.

8. Practical Example, Condominium in Graz

# Key Data
Market Value           = 280,000 €
Minimum Bid 50 %      = 140,000 €
Award Price            = 208,000 €
Ancillary Costs (≈5%)  = 10,400 €
Renovation             = 15,000 €
Total Investment       ≈ 233,400 €
Market Value after Renovation according to broker: 260,000 €

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9. Checklist: Proceed Step by Step

1. Search the edict file for suitable objects
2. Read the expert opinion and arrange a viewing
3. Obtain financing confirmation
4. Secure deposit (savings account or bank guarantee)
5. Establish bidding strategy (Maximum bid / Jump bid)
6. Attend auction date or participate online
7. In case of awarding: Adhere to payment deadlines and ancillary costs
8. Complete land registry registration and insurance

10. FAQ, The Most Common Questions

Can I contest the expert opinion?

Yes. Within 14 days of publication, a statement along with a counter-expert opinion can be submitted to the court.

Are there online auctions?

Since 2024, internet auctions are permissible, provided the court orders them. Participation takes place through a secure justice portal.

Do I have to pay a broker's commission?

No. There are no broker fees for court valuations.

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Conclusion, Strategies for Successful Awarding

Forced auctions are not a mystery. Those who know the process, critically analyze the market value, and structure their finances well have the best chances of acquiring high-quality real estate well below market price. Transparent rules, a clear timeline, and the opportunity to buy without broker commissions make Austrian forced auctions an exciting and rewarding way to secure property or expand one’s portfolio.