- 3 min read
- 13.04.2026
- by Benjamin Rogmans
The courtroom is not a marketplace
When heirs cannot reach an agreement, the property often ends up where it belongs least from an economic standpoint: in court.
From a legal standpoint, a partition auction is a sound instrument. Economically, however, it is usually the least desirable solution in the current market phase. This has less to do with family conflicts than with the structure of the investment market in 2026.
Since interest rates began to rise, the pool of potential buyers has narrowed significantly. The days when virtually every investor could secure financing are over. Banks are conducting more rigorous due diligence, loan-to-value ratios are more conservative, and equity requirements are higher. Anyone buying today needs either substantial liquidity or a robust financing structure—ideally both.
A foreclosure auction does not take this reality into account. It relies on a sufficient number of qualified bidders showing up on the day. Yet it is precisely these buyers who act selectively. Today’s professional investors review documents in advance, structure financing lines, calculate Capex, assess ESG risks, and evaluate legal specifics. This process requires time, transparency, and reliability—none of which exist in a courtroom.
The hearing is public, the documents are often incomplete, and due diligence is limited. Financing must effectively be secured in advance. Securing financing after the fact is virtually impossible in a restrictive lending environment. Investors holding multiple properties, in particular, frequently hit internal real estate quotas at their primary bank and require additional credit lines. This cannot be organized within a few days or weeks.
Added to this is a second shift: the proportion of professional buyers has increased significantly. Family offices and institutionally oriented investors are currently among the most active groups in the Berlin market. They have liquidity but operate discreetly and in a process-oriented manner. They prefer structured sales processes with well-organized data rooms, clear communication, and a predictable timeline. The auction setting does not fit this requirement profile.
The result is not a dramatic slump, but a structural discount. In practice, bids at partition auctions regularly fall below the price level that could be achieved in a competitively organized bidding process. Not because there is no demand, but because it is not optimally activated.
Another factor is often underestimated: time. Months pass between the application and the auction. During this phase, it often remains unclear who will handle administration, maintenance, or tenant communication. Property risks and uncertainties rise, while the market does not stand still.
The decisive difference lies in the process. A structured sale specifically identifies investors currently capable of financing the transaction, clarifies the capital structure early on, transparently addresses technical and legal issues, and generates competition among qualified bidders.
The partition auction replaces this mechanism—which often takes months—with a single date. In a market characterized by selective financing, rigorous vetting, and professional investors, that is not enough.
Communities of heirs are often under emotional pressure. This is precisely why it is worthwhile to take an early and objective look at the economic side of things. The courtroom provides clarity regarding ownership structures. It does not determine the best possible price.
