We a looking to take a crack at buying a house at auction. We visited the property and it looks in order. The problem is that we do not fully understand how things work.
The sale is being forced by the bank that is owed ~500K, on the same sheet your have other lenders that are owed ~200K. The commune is owed ~12K. This brings the total debt load to ~712K.
My understanding is that there is priority on who gets paid first.
1. The commune.
2. The bank.
3. Other lenders.
The bank is probably place a bid at 512K so that they and the commune get paid.
I have 3 questions.
1. Does the winning bid assume existing debts?
2. What does TOTAL DES DROITS DE GAGE 900K mean.
3. If they are any other liens on the property do they need to be paid off by the winning bidder, or can they be removed later on without paying?
The below link on Zwangsversteigerungen (forced auctions) notes (translated):
"The property shall be auctioned off with all encumbrances (mortgages, encumbrances on real property, easements, etc.) attached thereto in accordance with the enclosed list of encumbrances, provided and to the extent that they are covered by the auction price. Any lien claims not due shall be transferred to the purchaser up to the amount of the auction price. Where a personal debt obligation is connected with these encumbrances, this shall pass to the successful bidder (Art. 135 para. 1 SchKG)."
after sell - each creditor is paid by the amount owned - it could be that there is some penalty etc - but it's going to come at the end - as invested capital is paid first and earnings/costs are at the very end.