Note: The following article is for general guidance only. For binding legal advice, we strongly recommend that you consult a specialised lawyer. We will be happy to put you in touch with the right lawyers in our region.
What is a forced sale?
A forced sale is a legal procedure in which a property is sold at public auction to settle an owner's outstanding debts. This usually happens when loan instalments have not been paid over a long period of time.
Foreclosures 2025
The number of foreclosures in Germany rose again in 2025: With around 14,082 proceedings recognised the level is about 4.7 per cent above the previous year and continues the upward trend that has been ongoing since 2023. There was already a significant increase to around 13,445 appointments in 2024, after around 12,332 proceedings were registered in 2023.
The market volume also grew in parallel: the cumulative market values of the advertised properties reached around 4.76 billion euros, which corresponds to an increase of more than ten per cent compared to 2024. These figures are based on analyses by the market observer Argetra, which, among other things, is organised by Handelsblatt were taken up.
For market participants, this development signals increasing momentum in the realisation market - both as an indicator of financial burdens on individual owners and as a potential entry segment for investors with a corresponding risk profile.
The values are based on analyses of Argetra data.
Why do lenders want to avoid foreclosure if possible?
Lenders have no interest in carrying out a forced sale as this is often financially disadvantageous for them. In attractive property markets such as Berlin, a property is often sold at auction at prices 20-30 % below the actual market value. Banks and lenders therefore often favour alternative solutions that are more advantageous for both the debtor and themselves.
Options for averting a forced sale
- Early communication with the bank Open communication with the bank is the most important step. If you can credibly demonstrate to the bank that your financial bottleneck is only short-term, various options can be considered, such as temporarily adjusting the terms of the loan or deferring payments to provide financial relief.
- Debt rescheduling If the fixed interest rate on your loan has expired, you can negotiate more favourable conditions with your bank. This can help to reduce the monthly charges and restore your ability to pay.
- Letting or subletting If your property is not fully utilised, you could rent it out or take in a subtenant. In Berlin in particular, rental income can provide considerable financial relief and help you to continue to service the loan.
- Sale of the property If the financial problems are of a long-term nature, a voluntary sale is a sensible alternative to a forced sale. This allows you to realise the market value of the property and settle your debts without having to accept the financial disadvantage of an auction.
- Judicial measures If the proceedings have already been initiated, you still have a two-week right of objection. You can apply to the court to discontinue the proceedings if you can prove that you will be able to settle your debts within six months.
- Personal initiative A foreclosure can also be averted through personal savings measures. Selling valuable possessions such as jewellery or a car can help to make the outstanding payments.
What to do if foreclosure is unavoidable?
Foreclosure is a serious matter, but there are ways to minimise its impact or avert it altogether. The key is to act in good time and seek professional support.
Our team at Black Label Immobilien provides you with comprehensive support - from the valuation of your property through to its successful sale. A voluntary sale often offers the opportunity to realise higher proceeds than an auction. We are at your side with advice and practical solutions to help you find a way out of the crisis together.
Questions that we are repeatedly asked in connection with a forced sale:
Is it possible to sell a property independently if the bank threatens to foreclose?
- Bank approval: If the property is encumbered by a land charge, the proceeds from the sale must usually first be used to repay the outstanding debt. The bank is therefore involved, as it must approve the sale.
- Advantages of independent sales:
- An independent sale usually achieves a higher price than a forced sale.
- The owner has the opportunity to select buyers and help shape the terms of sale.
- The sale can solve the financial bottleneck and completely avert foreclosure.
- Time management:
- As soon as the forced sale is initiated, time is running out. An independent sale must therefore take place quickly before the property enters the auction process.
Is the bank obliged to give notice of foreclosure?
- Dunning stages: Before foreclosure takes place, the bank will send the owner several reminders to collect the outstanding payments. Only if these reminders are unsuccessful can the proceedings be initiated.
- Cancellation of the loan agreement:
- Before a forced sale is possible, the bank must cancel the loan agreement in writing.
- Termination takes place if the owner has not paid two or more instalments and the arrears amount to at least 10 % of the loan amount.
- Seizure and foreclosure:
- The bank applies to the competent local court to initiate foreclosure proceedings.
- The owner is officially informed and given the opportunity to lodge an objection within two weeks.
- Final deadline:
- Even if the proceedings have been initiated, owners can still negotiate with the bank or reach an agreement until the auction date.
Are there differences between the regulations on forced sales in the individual federal states?
The legal provisions on the forced sale of properties are largely standardised in Germany and are set out in the Act on Forced Sale and Forced Administration (ZVG). This federal law regulates the procedure and requirements for forced sales. However, in practice there may be differences between the federal states, particularly with regard to
- Competent local courts: The organisation of the local courts can vary. In some federal states, certain local courts are responsible for several districts when it comes to conducting foreclosures.
- Procedures: Although the legal basis is identical, details of the procedure, such as the announcement of auction dates or specific procedural steps, may vary slightly depending on the federal state.
Can I also sell to foreign buyers in the event of an impending foreclosure sale?
In Germany, there are generally no restrictions on the sale of property to foreign nationals. Both EU citizens and non-EU citizens can purchase property. It is irrelevant whether the buyer is a natural person or a legal entity (e.g. a company).
Important information when selling to foreigners:
- Linguistic understanding: When the purchase contract is notarised by a notary, it must be ensured that the foreign buyer fully understands the content of the contract. If necessary, a sworn interpreter must be called in.
- Matrimonial property regime and choice of law: It should be clarified which matrimonial property regime applies to the buyer and whether foreign law applies. This can be particularly relevant for married buyers.
- Financing and payment processing: Money laundering regulations should be observed when financing through foreign banks or making payments from abroad. Exchange rate fluctuations and international transfer fees can also play a role.
Where do foreclosures take place?
Compulsory auctions of properties in Germany usually take place at the competent local court. The local court of the district in which the property is located has jurisdiction. These are usually public auctions that are conducted by a judicial officer.
Place of the auction:
- The auction will take place in a courtroom of the district court.
- Information on the place and time is publicly accessible and is published in the district court's announcements or on special platforms such as Zwangsversteigerung.de.
Participation:
- Anyone who is interested in the property can take part in the auction. Prior registration is usually not necessary.
- It is recommended that you arrive in good time before the start of the procedure.
Publication of the dates:
- The dates for compulsory auctions are announced at least 6 weeks before the auction date. They can be viewed via public announcements on notice boards at the local court or on online portals.
Further sources of information:
- Online portals: In addition to the local courts, websites such as ZVG-Portal or Zwangsversteigerung.de provide information on dates and details of auctions.
- Notices: The respective local courts have notices and electronic boards on which all upcoming foreclosures are listed.
How many foreclosures were there in Germany in 2023?
In 2023, a total of 12,332 forced sales of properties took place in Germany, which corresponds to a moderate increase of 2.1% compared to the previous year, in which 12,077 properties were auctioned. The total value of the properties auctioned reached 3.87 billion euros, an increase of 15.2%.
At 46.5%, detached and semi-detached houses accounted for the largest share of properties sold at auction, followed by condominiums at 21.5%. Commercial properties and apartment blocks accounted for 15.4% of the auctions, while land contributed 14.9% and garages and other properties only 1.8%.
North Rhine-Westphalia was particularly hard hit with around 20% of foreclosures - a consequence of its high population density and extensive property market. Among the cities, Berlin topped the list of auction dates, followed by Munich, Leipzig, Chemnitz, Zwickau and Duisburg.
This data is based on the 2023 annual report by the specialist publisher Argetra, which analysed the dates for foreclosures at all of the almost 500 local courts in Germany.
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