Procedure of banks when purchasing an existing property

In Germany, there are laws and regulations for almost everything; this probably concerns the Regulation on the Determination of Loan Values of Real Estate pursuant to § 16 paragraphs 1 and 2 of the Pfandbrief Act (Loan Value Determination Regulation - BelWertV), there you might just take a look, for example, appraisals in § 5 in conjunction with § 24 BelWertV

The lending value is usually well below the market value, or is that wrong? In addition, this means that the bank determines how much money a seller can ask for his existing property without ever having seen it, right?

That is correct, the lending value is supposed to reflect the value that can be achieved in the long term and without cyclical fluctuations. Furthermore, depending on the type of bank, banks then only lend up to 60 or 80% of the determined lending value.

I am myself a bank clerk and work in credit processing, meaning that property valuation is my daily routine. The requested documents are all quite standard, otherwise a loan-to-value assessment is not possible. This value is always below the market value because it is designed for the long term. In some areas, such as Munich, multipliers are still used due to the special market situation. We are in a very rural area here; an interior inspection is not carried out by us, even though the new loan-to-value guideline requires this. When purchasing an existing property, we apply a safety discount of 10% on the purchase price and then apply 80% of this value. However, the purchase price itself must also be checked for plausibility. The bank does not intervene in any negotiations itself. The customer comes with a purchase price and the bank then checks whether the customer can afford it or has sufficient collateral available. Then there is a "yes" or "no." However, the bank will not go to the seller to negotiate the price or similar. Obtain financing confirmation, then go to the notary who takes care of everything else. However, I can only speak for our small bank in the countryside. At large institutions in the city, things certainly work differently.

I can, however, only speak for our small bank in the countryside. It certainly works differently at large institutions in the city.

In principle, it is no different at the big banks either. Not even at the direct banks.