Foreclosure Timeline: After the Sale

After the foreclosure sale, when a new deed has been recorded with a new owner’s name on it, you go from homeowner to tenant.

After the foreclosure sale, when a new deed has been recorded with a new owner’s name on it, you go from homeowner to tenant. A commonly held belief is that you aren’t legally a tenant unless you have entered into a formal landlord–tenant relationship and agreed to pay rent. In fact, with a couple of exceptions, you are considered a tenanttypically termed a tenant at will or tenant by sufferance.

The first step toward eviction is to send you a written notice stating that you must move out. How soon you're likely to get such a notice depends on who owns your house after the foreclosure sale: a new buyer or the lender.

If Someone Buys the House

If, at the foreclosure sale, your house is sold to a new owner, that new owner will likely want possession of the property as soon as possible. You may receive a termination notice days or weeks after the auction or sale, just to get the process moving. Exactly when you can expect this termination notice will depend on the new owner’s agenda and the experience the new owner has in removing tenants.

If the new owner wants to occupy the house and has experience in evicting tenants, you can expect the notice to come sooner rather than later. If, on the other hand, the new owner is a business that buys and resells foreclosed homes, there might be a delay before you get a termination notice, just for bureaucratic reasons. And if the new owner is a novice in buying foreclosed homes and has no experience in evictions, you can expect a delay while the new owner finds a property management firm or lawyer to do the work.

If Your Lender Ends Up With the House

If the property is not sold to a new owner at the foreclosure salethat is, nobody makes a bid that's higher than the lender's credit bidyour lender will end up with title to the property. (A "credit bid" is when the lender bids a credit up to the amount of the borrower's debt, rather than cash, at a foreclosure sale.)

If your house is in an area where values are relatively stable, there are few other homes for sale in the neighborhood, and it is in saleable condition, the lender will likely want you out yesterday, because the conventional wisdom in real estate circles is that vacant houses are easier to sell. (Read about evictions after foreclosure.)

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