Danny contacted me on Tuesday at noon. His tone tried to sound calm, but I heard the anticipation behind every word. “I found a property in Greece, from a forced auction. Two rooms, first floor, a step from the sea. A ridiculous price.” He sent me a link to the proceeding's record. I read it. I took a deep breath. And I told him: “Danny, let's meet.”
Danny is a senior manager, in his fifties, with experience in the capital market and zero experience in real estate abroad. Savings, logic, and a strong desire to do something “concrete” with the money. He googled “forced auction Greece” and found forums full of enthusiasm: “Prices from ten years ago!”, “Opportunity of a lifetime!”, “I bought an apartment thirty percent below market!”
What the forums didn't write is what I see on the ground. Let's talk about it openly.
A forced auction, in Greece called αναγκαστικός πλειστηριασμός, is a proceeding in which a creditor (usually a bank) initiates attachment proceedings on a debtor's property, the court approves, and the property is sold in a government electronic auction on the official platform <a href="https://www.linkedin.com/redir/redirect?url=http%3A%2F%2Feauction%2Egr&urlhash=zgY8&trk=article-ssr-frontend-pulse_little-text-block">eauction.gr</a>. Contrary to the common image, there is no physical courtroom and no appointed receiver; bids are submitted online, right from your home computer, under the supervision of the Ministry of Justice.
I explained to Danny: first, the property is sold AS-IS, with no representations and no warranty; there is no one to tell you that the interior wall has been damp for three years. Second, to enter the auction at all you must put up a deposit of about 30% of the opening price. Third, if you win, you must pay the full consideration within ten business days only. There is no time to raise financing afterwards.
And fourth, secondary liens. The primary mortgage that led to the foreclosure is usually erased in the proceeding. The real risk is secondary debts, to suppliers, to the building committee, to the local authority, which don't always appear in the record and can “go down” with the property. Checking the registration at the Greek land registry is an absolute must.
And there is something else Danny didn't expect: a property sold in foreclosure may be occupied. Yes, with people inside. After the ruling, the buyer notifies in writing the end of the tenancy, and after two months, according to law, the eviction is supposed to be carried out. In practice, the debtor may file an appeal on the proceeding itself, which can delay the entire matter by months.
Danny listened, took a sip of his coffee, and said: “So what, it's not worth it?” And I surprised him: “I didn't say that.”
Advantages: a legal opening price of 2/3 of the appraisal value, significantly lower than the open market; a legally supervised proceeding, official and legitimate; the possibility of winning a property that isn't offered on the market; online access from anywhere in the world; high yield potential after renovation.
Risks: property sold AS-IS without prior physical inspection; a 30% deposit required in advance to enter the auction; full payment within 10 business days, with no flexibility; secondary liens that are not erased automatically; possible occupants in the property, eviction requires notice and a process.
Because the truth is more complicated. A forced auction in Greece, and likewise in Romania, where I also work with clients, can be an excellent deal. The legal opening price is 2/3 of the appraisal value, and sometimes even lower in a repeat auction, which can lead to a purchase 30-40 percent below market. And if the property is clean, due diligence confirms it, you can enter a deal you can't find on the open market.
In the end, Danny and I did it right. Through the Greek partner lawyer who examined the proceeding file in depth. We discovered two small liens in favor of suppliers that were supposed to be erased, and verified this in writing. We checked the registration at the Greek land registry. We prepared the 30% deposit in advance. The property was empty. And Danny won the auction.
He purchased a two-room apartment on a small island near Athens for 58,000 euros. Current market value: around 85,000. Today it is rented to tourists and yields a gross return of about eight percent. Not bad for someone who a year ago didn't know what αναγκαστικός πλειστηριασμός is.
But, and I emphasize, Danny succeeded because he didn't try to do it alone. He understood this is a market that needs a local guide, dual legal advice (Israeli and Greek), and cold thinking. I also know investors who entered such properties without guidance, and discovered afterwards that the structure was not legal, that there was a pending lawsuit, or that the ruling was canceled retroactively by the court due to a defect in the proceeding.
I'd love to hear: do you have experience with forced auctions abroad? Tell us in the comments.
Stories are based on real situations, with identifying details changed. Not legal advice.
Translated from the Hebrew original. עברית