How to buy real estate at an auction

How to buy real estate at an auction

What types of real estate are being auctioned
The economic crisis seems like a thing of the past and the real estate market is experiencing growth once again. However quite a few real estate items are still for sale, and they are being auctioned. 
Please visit the Slovenian Judiciary website for more information on such auctions. In order to get a more detailed insight, the buyer must consult the public announcement on the Ajpes website. Also useful are online auction portals which list the auctions published by various parties, mainly municipalities. These portals usually also contain photographs and list the relevant locations. 
BAMC publishes its list of active auctions of real estate items pledged in our favor at its website, under the heading “Sales in bankruptcy and judicial claim enforcement proceedings”. (

Read the public auction announcement carefully
Before you decide to purchase real estate at a public auction, read the public auction announcement carefully. Pay particular attention to various sections of the announcement:

  • What part of the real estate is being put on auction: Please check if the real estate is being sold whole, or if only a part of the real estate is being sold. 
  • Security deposit: The announcement usually states that potential buyers must make a security deposit following a particular procedure to be eligible, usually 10% of the opening price. By making the security deposit, the bidder accepts the opening price and commits to participate in the auction process, as the announcement clearly states. If a bidder who has made a security deposit as the only potential bidder, and fails to appear at the auction or does not accept the opening price, the bankruptcy trustee may retain the security deposit. The same rule applies if multiple bidders have made security deposits. In this case, the bankruptcy trustee retains part of each bidder’s security deposit, up to the total amount of one security deposit. Bidders who were unsuccessful in the auction or had a legitimate reason to pull out of the auction will receive a refund of their respective security deposits.
  • Defining the price increments and the time after which the best bidder is announced. 
  • The requirements which legal entities and individuals seeking to participate in the auction must meet. If a bidder participating in the auction is unable or unwilling to attend the auction themselves, they may appoint a proxy, which may be a legal entity or an individual. 
  • Rules for signing the contract of sale: It is also important to note the clause that the buyer is responsible for covering the costs of all applicable dues and taxes under applicable law, as well as the costs of drawing-up the contract of sale (unless they prepare it themselves) and costs of transfer of ownership. Before participating at the auction, the bidder must take into account all the auction rules and any costs, as this will ultimately determine the final selling price. 

Auctions are a specific but safe way to buy real estate
Buying real estate at a public auction is a safe process, but it does have a few important characteristics:

  • After the full purchase price is paid, the court issues a decision on delivery of the real estate, which annuls all cash claims, regardless of whether or not they were paid in full. The court then uses the proceeds from the sale at a public auction to pay off, by order of priority, the costs of the auction and the creditors. 
  • The decision on the sale grants an enforceable basis to vacate any existing occupants of the sold real estate. This way, the court ensures that the buyer is given ownership and possession of the real estate, vacated of any persons and free of all encumbrances. 
  • The exception is where the previous owner or tenant still occupies the real estate concerned, and exercises the right within a legally permissible period to remain an occupant for a specified time after the sale of the property in question. Of course, this must be clearly stated in the auction announcement, since the new owner will be bound to respect such stipulation. 

What are non-compliant structure auctions?
Public auctions may also be used to sell non-compliant structures. The incompliance may exist for a number of reasons, however the later legalization or rectification of the use of the structure is the buyer’s responsibility. The auction announcement in insolvency proceedings states that the real estate assets subject to sale under Article 340 of the ZFPPIPP are being sold on an “as-is” basis, with no warranty for any material defects. 

Consider all potential obligations and reservations before buying
The data about real estate, the land registry and land surveying administration data is available to the general public. Also available to the general public is the public auction announcement, complete with all the details about the process of auctioning and the purchase of real estate. It is in the bidder’s interest to take note of all obligations and consider any potential reservations they might have before deciding to participate at the auction or buying the real estate in question.

Public auction process
Place and date: The public auction announcement will state the date, time and the location of the auction. Usually, the bankruptcy trustee will hold auction in his office or in a conference room, if there are multiple bidders participating. 

Who can participate: Only a party who has made the security deposit (usually 10% of the opening price) on time may participate. The bankruptcy trustee checks the payments and identity of the bidders. Companies’ legal representatives must present an extract from the commercial register as proof of legitimate representation of the company concerned, and any proxies must present the relevant power of attorney. 

Auction and the bidding process: 

  1. After all the data is verified, the bankruptcy trustee may begin the auction. Essentially, they will sum up the terms from the announcement, with a description of the real estate being sold. 
  2. Bankruptcy trustee begins the auction by asking the bidders if any of them accept the opening price. After the opening price has been confirmed, increasing bids are placed at predetermined increments, as published in the auction announcement. 
  3. Once a price is reached which is not raised further by any bidder, the bankruptcy trustee  will wait a few minutes. They will repeat the last bid and once again invite the bidders to raise. If none of them decide to raise, the bankruptcy trustee announces the best bidder, who is then sold the real estate in question.
  4. A time and place for signing the contract is agreed upon with the best bidder, while other bidders leave the auction venue. The bankruptcy trustee will refund their security deposit within three days.
  5. After signing the contract of sale, the best bidder must pay the remaining amount within a given deadline, which may be no longer than three months. 
  6. After the purchase price is paid, the court issues a decision on delivering the real estate into the buyer’s possession, and registers the new owner’s title in the land registry. 
  7. Lastly, the bankruptcy trustee hands over the real estate into the buyer’s possession. 

Coordinate with the real estate advisor
If you are looking to buy real estate at an auction, but do not feel confident you understand the auctioning procedures, we recommend you contact our partner real estate advisor RE/MAX, who will accompany you throughout the process, from viewing the real estate to the final purchase.

Overview of current auctions of real estate collateral pledged in favor of BAMC
The list of active auctions of real estate collateral pledged in favor of BAMC is available at this website, under the heading “Sales in bankruptcy and judicial claim enforcement proceedings”. 


By: Boštjan Štefelin (DUTB d.d.) and Janez Jaklič (RE/MAX Ljubljana)