6. How does the hearing before the preliminary relief judge work to accept a private bid?

When a mortgage holder wants to accept a private bid instead of selling the property through a public foreclosure auction, the preliminary relief judge must first approve this bid. The procedure is as follows.

Submission of the request

The handling notary submits a petition to the preliminary relief judge on behalf of the mortgage holder. This includes:

the private bid;
the bidder’s details;
the reasoning for why this bid should be accepted.

Explanation during the hearing

During the hearing, the notary explains the request. The preliminary relief judge assesses, among other things:

whether the bid is market-conforming and serious;
whether the procedure was followed correctly;
whether no interested parties are disadvantaged.

If several private bids have been submitted, the judge assesses which bids are valid and which bid is most appropriate.

Possible situations when multiple interested parties are present

Approval by the judge is not automatic. If multiple interested parties appear during the hearing, the preliminary relief judge can choose from three options:

All parties are referred to the auction house, which schedules a new public auction date. Private bidding is then no longer possible; the auction determines the price.
The parties present may bid higher immediately, starting from the highest private bid. The judge collects the bids and establishes the highest bid.
Each interested party submits one final bid. This method is rarely used for reasons of transparency.

Good to know: the preliminary relief judge preferably does not act as auctioneer. The judge’s role is to review: to assess care, fairness and the justification of the private bid in relation to a public auction. Nevertheless, we always advise being present at a hearing where your highest private bid is being assessed.

Decision: approval or rejection

The judge decides whether the private bid is approved or rejected.

Approval: the private bid is approved. The court issues an order and the sale may take place privately. The bid is then definitively accepted.

Rejection:

The sale must still proceed through the foreclosure auction.
Private bidding is then no longer possible.
All interested parties are referred to the online auction to bid there. This allows the judge to safeguard market-conforming and transparent price formation.

After approval: transfer at the notary

The notary schedules the transfer date. The buyer must deposit the amounts due on time; the notary handles the further transfer.