Fashion blogger Jessica Weiss (“Journelles”) just bought a house in foreclosure. Here she told us how this process works and what difficulties she had to overcome.
Big problem: You couldn’t see the inside of the house until a month after you bought it. “In the end, the purchase was a surprise egg and we were lucky with the content,” Weiss later tells us.
Her advice: Before you actively participate in a mortgage auction, you should be 100 percent sure that you can get the financing on your feet.
Are you going to buy a house you’ve never seen before? Jessica Weiss had this problem.
Founded by Weiß in 2012, “Journelles” is one of the most famous and largest fashion blogs in Germany. But despite that success and her 215,000 followers on Instagram, Weiß also has to deal with the usual pitfalls of the real estate market.
She and her musician husband, Johann Fink, were looking for a house with a garden in Berlin – and they understandably have three children. However, it was also clear to Weiß: “The real estate situation in Berlin is very difficult.” She searched for a drug for two years but found nothing, the 36-year-old told her Business Insider.
I started with the topic of foreclosures out of “slight desperation.”
In the end, there was still one choice: buy a home in foreclosure. All information about foreclosure in Germany can be found on the ZVG online justice portal. Below is a list of all auction dates in Germany. “Out of desperation, I started looking around,” Weiss recalls.
On the page you get various information about real estate. Among other things, you will find the title, a brief description of the property, market value, an appraisal, and the date and place of sale of the mortgage.
“She didn’t know the situation from the inside and that was, of course, the remaining danger.”
White loved a house from 1927, with living space of 115 square metres, basement, roof trussing, and 1,000 square metres. But the report lacks one piece of information important to real estate buyers: the status.
The appraiser can only appraise the home from the outside because the homeowner hasn’t let him in. “She didn’t know the condition from the inside and that was of course the residual danger,” Weiß says. She was ready to make a complete renovation of the property. But the desire to own a house was so great that Weiß decided to gamble and drive to the auction.
When she held the check in her hand, she panicked
The appointment took place in the district court and is a public procedure, to which everyone can go. In order to participate in the distribution and also to allow him to bid, Weiß had to bring with him ten percent of the specified market value. Either in the form of a check or advance bank transfer. A refund will be given if the home is not auctioned off.
What Weiss didn’t know when she received the check from the bank: The money was debited from the bank account at that moment. Ten percent of the total is not small. “You keep your assets in your own hands — and I panicked,” Weiß says. For her, this was the attitude she had to “show the most courage,” as the fashion blogger says.
“Sweat was on our foreheads and we were trembling.”
In the auction, you must bid for at least 30 minutes, this is the rule. “Only after a quarter of an hour someone came up to the front and made their presentation. I didn’t dare at first,” Weiss says.
After some offers from others, White finally started bidding as well. Before that, she agreed with her husband on a fixed maximum. Weiss doesn’t want to tell us how high this is. Then at some point I called our absolute last show. It was clear to me: this is our last chance. Suddenly the count went down, and then the hammer struck the table: “Sold! “
“My first thought was: Do we own the house? That couldn’t be true. We were sweating on our foreheads and shivering,” Weiss recalls. She went to the auction “without any expectations” and suddenly became the homeowner – without ever seeing the property.
She wasn’t able to see the inside of the house until a month after she bought it
The distribution date was set immediately after the auction in the district court. “By that time we had to arrange financing.” The family was given nearly three months to do so.
“Initially, it took a month before we were even allowed to visit the house,” Weiß says. “The resident did not want to let us in. But only when we are in the Land Registry.”
The first sighting was “very important” to obtain financing, as the bank needed a new report. “The appraiser from the bank was there and our engineers took the measurements and put an estimate of the renovation costs.”
What was the first thing the fashion entrepreneur thought when she saw the inside of the house? “I was in luck! Nice and spacious lobby with a very old staircase and in good condition,” says Weiß. “In the end, the purchase was a surprise egg and we were lucky with the content.”
The first is the “nonstop” preoccupation with officials and “bureaucratic matters”.
In order to get financing for the sale of the mortgage, the bank needed “lots and lots of information,” says the 36-year-old. It “felt a thousand phone calls” to the Land Registry and building authorities. “Can’t believe how much you have to do.” The problem is that you don’t have any documentation about the house yourself.
We also had to find out how the house was insured. “It was a very difficult and stressful task to get the documents together and also have time to worry about financing,” Weiß says. Information regarding building mortgages, land registry entries, insurance, and electricity and gas contracts are just a few of the documents she had to obtain.
The problem with foreclosures is that the reason for this is usually disagreement about why that home is being sold. “People don’t like to voluntarily help out with documents,” Weiß says. “All in all, you have to deal with an incredibly large amount of bureaucracy.” You are “nonstop” busy with officials and “bureaucratic stuff” and that’s what’s particularly stressful.
In the end, funding was so scarce that Weiß came up with the idea of overdrafting her account. In all, it was about 700,000 euros in red, she says in a YouTube video about buying the house. This does not correspond to the entire purchase value, but rather a part of it. The amount was released, and an overdraft interest was added, about 12 percent. The application was approved one night before the deadline and Weiß was barely able to transfer the money.
The auction was grueling, but looking back, it was a ‘success’
Her tips for those who also want to buy a home in foreclosure: You should read the report “very carefully.” In some cases, you can also contact attorneys who will tell you more about it in person. It is also a good idea to drive to the property and have a look at the property on site. “I know a few people who are interested either, they even talk to the neighbors,” Weiss said. The more basic information you have, the better prepared you will be for a potential purchase.
In addition, you must be 100 percent sure that you can get the financing on your feet. It is best to postpone the distribution date as far back as possible. “So it’s better to be on the safe side and get the financing than to end up with as much pressure to get the loan as we did.” Finally, you might recommend going to a foreclosure auction without actively bidding. “You have a good feeling about how something like this would work.”
Did she regret getting her home out of foreclosure because of all the stress? “Well, I will say, looking back, this thriller we got at auction was a success,” Weiss sums up. “But the excitement as a whole certainly wasn’t good for high blood pressure.”