I’m hoping to buy a home in Idaho. My goal is to find something on a few acres, maybe five or so. There are several properties that fit this description in foreclosure in the area that I like. I’m thinking about bidding on one of the properties at the foreclosure sale, but I’m concerned that the homeowners might be able to get the property back once the foreclosure is over and done with. Could this possibly happen after I’ve bought the property and moved in?
Yes, it is possible, although very uncommon, for Idaho homeowners to get the property back after a foreclosure. They would do so by paying you the purchase price you paid at the foreclosure sale, plus various other costs. This is known as redeeming the property.
Foreclosed homeowners in Idaho get the right to redeem the property only in the case of what’s called a judicial foreclosure. If the foreclosure is nonjudicial (as most are), the homeowners cannot get the home back after the foreclosure.
Read on to learn more about these different types of foreclosures and how Idaho’s redemption laws might affect your ability to settle into your new property without fearing that the homeowners might take it back.
The majority of residential foreclosures in Idaho are nonjudicial, which means the lender does not have to go through state court to foreclose. Judicial foreclosures, in which the lender files a lawsuit in court, are also possible.
How does the distinction between a nonjudicial and a judicial foreclosure matter to you as a prospective buyer at a foreclosure sale? As you’ll see below, if the foreclosure is nonjudicial, the former homeowner won’t have the right to redeem the property, which is good news for you.
How you can find out whether the foreclosure is nonjudicial or judicial. An easy way to learn which type of foreclosure process the lender is using is to go to www.zillow.com. First, sign up for a free account and then log in so you can view all of the foreclosure information. You can find the home you’re interested in by entering the address in the search box, which brings up a map of the neighborhood. Next, click on the home’s address, which is a link to its Web page. Then, scroll down to where you see “More foreclosure information” and click on the link to find out whether the foreclosure is nonjudicial or judicial. (If you want to call someone for information about the foreclosure, you can usually find the name and phone number of the foreclosure trustee or attorney here as well.)
In Idaho, the foreclosed homeowners can't redeem the property after a nonjudicial foreclosure (Idaho Code Ann. § 45-1508).
If the foreclosure is judicial, the homeowners may redeem the home within:
If the Idaho homeowners from whom you purchased were to redeem, they would have to reimburse you for the full amount you paid at the sale, plus all other allowable charges such as:
You can see why redemption is not common. An Idaho homeowner who, perhaps only six months ago, was unable to keep up on the home’s mortgage payments would have to turn around and come up with not only the purchase price, but additional amounts as well.
The IRS may redeem the property after a judicial or nonjudicial foreclosure, if there was a federal tax lien on the home. The IRS gets 120 days (or the allowable period under state law, whichever is longer) to redeem. The IRS would send you a notice beforehand if it is considering redeeming the property, though it is uncommon for the IRS to redeem.
Besides the possibility of redemption, there are a few other issues to take into account when thinking about buying a home at a foreclosure sale. For example, you won’t get any seller disclosures giving you inside information about the features and condition of the property before the sale, as you would in an ordinary sale.
What's more, you will have to purchase the property “as is,” without being able to negotiate repairs. Since the owner was in financial distress this means the property could be in rough shape. (Learn more in Nolo’s Buying Foreclosed Properties area.)
To find the statutes that discuss the right to redeem the home in Idaho, go to Title 11, Chapter 4 and Title 45, Chapter 15 of the Idaho Statutes.