I have been reliably informed that the smart money goes direct to bankrupsy auction property either from court or local goverment. Only propery which has serious problems then goes to private auction companies who make good profits even though the properties appear cheap.

A house at the dresden auctions which may have a start price of €15,000 and which auctually sells for €40,000 may well have been available from the local goverment website at €10,000 and no auction fees would have been involved. I guess it all comes down to knowing where to look, these companies seem to think all foreigners are gullible and will buy anything that seems cheap, and they were such good bargains why didn't some of the people working for the auction companies buy them themselves and yes they are allowed to do so.

Think very carefully before buying and check out other places to see if you can find better german properties at cheaper prices.
A friend of mine bought a house at the auctions for €20,000, when he went to get a quote to make it liveable the cheapest one came in a €220,000 because of it's poor state, he also got hit with a €26,000 bill to connect the toilet to city sewage system 3 weeks after completeing the sale.