What Happens After the Foreclosure Sale Date?
Created by FindLaw's team of legal writers and editors | Last updated February 28, 2017
As a homeowner, the last thing you want to think about is losing your home. But as many people have found, it’s common to struggle with those hefty mortgage payments, especially if you lose your job or the housing market crashes. Even if you have fallen behind on your payments, you may be able to get back on track and save your home. However, if you’ve exhausted your options and face foreclosure, it’s important to know what happens after the foreclosure sale date.
Can You Get Your House Back After Foreclosure?
Did you know that you may be able to regain ownership of your house even after the foreclosure sale date? Many states allow for this under a process called “statutory redemption.” Under this rule, you have a limited amount of time to pay the foreclosure sale price (plus interest in many cases), and you are usually allowed stay in your home during the redemption period, whether it’s 30 days or two years.
Moving Out Voluntarily After the Foreclosure Sale Date
If you’ve stopped paying your mortgage, you’re allowed to remain in your home until the foreclosure process is completed. Once you reach the foreclosure sale date you go from being a homeowner to a tenant, as title legally passes from you to the new owner. Some owners may agree to rent the home to you, but most will want to take possession as soon as possible. Each state has its own laws and regulations governing this process, including the amount of time an owner must give you to vacate the property.
At this point, you can move out voluntarily, attempt to redeem the property through statutory redemption, or wait until the sheriff shows up to execute an eviction. Because the eviction process takes time and money, some owners will actually pay you to move out voluntarily, a practice called “cash for keys.” This arrangement spares you the hassle of an eviction and provides you with some extra funds to help with your relocation.
Eviction After Foreclosure
So what happens after the foreclosure sale date if you’ve decided against moving out voluntarily? In that case, the new owner will try to force you out. However, this must be done formally through the court using the eviction, or "unlawful detainer", process. Once you’ve received a notice of eviction, you can still move out voluntarily. Otherwise, you will be escorted off of the property in a matter of days by local law enforcement.
It’s also important to know that an eviction can further damage your credit score, making it difficult to obtain a loan or convince a landlord to rent to you. Many housing applications and even some job applications will ask if you’ve ever been evicted, and landlords and employers can verify this information by examining evictions in public records.
Rebuilding Your Finances After the Foreclosure Sale Date
Whether you move out voluntarily or are evicted, a foreclosure does significant damage to your credit score. This makes banks very hesitant to lend you money, and makes landlords question whether you’ll pay rent consistently. As a result, you should start saving as much money as possible during the foreclosure process in case you need to pay a higher deposit to ease the concerns of your future landlord. Additionally, you’ll need to focus on rebuilding your credit by paying bills on time and getting control of your debt. After seven years, the foreclosure should disappear from your credit report, making life a little easier.
What Happens if My Landlord Goes into Foreclosure?
It’s also possible to be seriously affected by a foreclosure even if you don’t own a home. This is the case for renters whose landlords fail to pay their bills. Without even knowing that a foreclosure is taking place, you could receive a notice to vacate the property – even if you have many months left on your lease. Fortunately, you should be given at least 90 days’ notice, and you may be able to sue your landlord to help cover the costs of relocating.
Be Prepared for What Happens After the Foreclosure Sale Date
Since a foreclosure has significant ramifications on your housing, finances, and credit, it’s important to consult an attorney as early on in the process as possible. Whether you’re trying to avoid foreclosure, or you’re in the final stages of one, you’ll need to know what your options are and what to expect after the foreclosure sale date. Be prepared and make well-informed decisions by contacting a local lawyer who has experience with foreclosures and foreclosure alternatives.
Next Steps
Contact a qualified real estate attorney to help you avoid or navigate the foreclosure process.