Land purchase through a bidding process - What is the final price?

Good day,

The following situation has now arisen with us:

Municipality X is offering a property through a bidding process. The minimum bid is predetermined.
On the internet, one only finds numerous advantages and disadvantages for the seller. For the buyer, however, search results are scarce.

My question is: How exactly does such a bidding process work? If I submit my highest bid, will that be taken into account at the end – in the event that I receive the contract? Or does the whole thing work like on eBay, where I submit my maximum bid and the lower bid + 1000 euros is used as the basis? There is nothing about this in the property tender.

My concern is that, in the event of being awarded the contract, I will end up paying significantly too much for the property because I have no idea how the demand will be. Currently, we are calculating +10% according to BORIS Hessen. It is a large property with a rather high minimum bid, which on the one hand suggests that demand will not be high, but on the other hand, I know the real estate market in my region and know what crazy things happen here. I am certainly not alone in this.

Has anyone among you had experience with this?
Thank you and best regards.

You pay what you bid as far as I know.
That was at least the case with acquaintances of ours.

How exactly does such a bidding process work?

Quite simple. Place a bid and hope it is the highest bid. Period. Maybe there is a clause that allows for an improvement of the offer. So you have a chance.

My concerns are that in the end, in case of being awarded the bid, I will pay significantly too much for the property because I have no idea how the demand will be.

That can happen.

It is a large property with a relatively high minimum bid, which on the one hand suggests that demand will not be high

Why do you think that?

Currently we are calculating +10% according to BORIS Hessen.

That’s not much. The standard land value is based on past data. In times of rising prices it is rarely meaningful in high-demand regions.

So you will pay your highest bid if you win the bidding process. So not the eBay variant, but if you bid €500,000 and the next highest bid is only €400,000, then you would have to pay €500,000.

Whether +10% on the BRW is sufficient is hard to say. There will be areas where this is enough, but there are just as many areas where the BRW lags so far behind that you would have to pay 30-40% or even more. Given the size of the property, it also depends on whether it can possibly be divided, etc... More information would be needed!

Just offer what you are willing and able to pay. If that is enough, great, if not, also great. You don't necessarily have to buy anything. And likewise, your highest bid was then just your price. You only paid too much if it is more expensive than you are willing to pay.

In our region, crazy things are currently happening on the real estate market as well, and I believe you wouldn't get far with 10% above the [Bodenrichtwert].