What a redemption period is and what to check before you list a foreclosed home or help a buyer purchase one

KW Default Solutions

Last updated October 30, 2026

If a buyer wants a recently foreclosed home, or you're asked to list one, this is worth saving. A right to redeem can affect when the sale is final and when a buyer can close.

What you'll be able to do: explain redemption, check your state's rules and talk with a buyer or seller about the risk.

011. What is a redemption period?

Ask: Is this home still in foreclosure, or has the foreclosure sale already happened?

Check: The sale date and the deed recorded after the sale. A deed is the paper that moves ownership to a new owner. A title company can pull both. That's the company that checks who owns a home and handles the closing.

Foreclosure is when the lender sells a home to pay off a loan the owner stopped paying. The sale is usually a public auction. The Consumer Financial Protection Bureau (CFPB) is a federal consumer agency. It says the home goes to the highest bidder, which can be the lender.

There are two kinds of redemption:

• Equitable redemption, also called the equity of redemption, happens before the sale. The owner pays off the whole debt and keeps the home. The cutoff depends on the state and the type of foreclosure.
• Statutory redemption happens after the sale. A state law lets an eligible person buy the home back by paying what that law requires. "Statutory" just means it comes from a written law.

Catching up the missed payments and fees is called reinstatement. It's a separate option, not a kind of redemption.

This lesson is mostly about the second kind. Here, "redemption period" means the time after the sale.

Script (to your buyer): "Before we go further, I want to know if anyone can still buy this home back. I'll check with the title company."

022. Does your state have one after the sale?

Ask: Does my state allow redemption after a foreclosure sale, and does it apply here?

Check: A local real estate attorney or a title company. Your broker may know who to call.

Some states have a redemption period after the sale. Others don't have a general one. Where one exists, state law sets the length and steps. They can also change with the type of foreclosure, the property and other facts.

There are two main ways to foreclose. A judicial foreclosure goes through a court. A non-judicial foreclosure happens without a court case, through required notices.

So don't guess, and don't rely on what you heard about another state. Ask about this home and this foreclosure.

03Check your state: questions to answer before you write or list

Two quick terms. A lien is a legal claim on a home for a debt. Clear title means no one else has a claim that could stop the sale.

Script (to a title company): "This home sold at a foreclosure sale on [date]. Is there any redemption period still running? If so, who can redeem and when does it end?"

043. Who can redeem, and what would they pay?

Ask: Who has the right to buy this home back, and how much would it cost them?

Check: The attorney's answer for this home, in writing if possible.

State law decides who can redeem after the sale. Sometimes it's someone other than the former owner. The attorney will tell you who.

The amount may include the sale price, interest, costs and other amounts the law lists. It has to be paid by a deadline.

There's also a federal piece. Say a federal agency held a lien behind the mortgage and was named in a court foreclosure. Federal law can then give the United States one year from the sale to redeem. For an Internal Revenue Service (IRS) tax lien, it's 120 days or the state's period, whichever is longer. An IRS lien can carry that same window after a non-judicial sale too. There are exceptions, so have the title company read the title.

Script (to the attorney): "Who can redeem this home, and what would they pay? Does a federal lien add its own window?"

054. Can the former owner stay during it?

Ask: Is the former owner still living there, and can they stay for now?

Check: A local real estate attorney, a legal aid office or the county clerk's office.

The CFPB says owners can stay in the home during the whole foreclosure process. How long they can stay after the sale depends on the state. In some states, they may have to leave a few days after the sale. In others, they may not have to move for months.

The CFPB also says homeowners with a Federal Housing Administration (FHA) loan may have added rights to stay. So the redemption period and the move-out date are two separate questions. Ask about both.

If someone lives there, be respectful. Get your broker's OK and proper access before you visit.

Script (to the investor or bank that bought it at the sale and now wants to list it): "Is anyone living in the home right now? Before we schedule showings, can you confirm their rights and how we get access?"

065. What should you tell a buyer looking at a recently foreclosed home?

Ask: Has this home's redemption period ended, or does one still apply?

Check: The title company's report and your broker. Talk with your broker about contract terms.

A home that sold at auction may come back on the market fast. The auction buyer may be an investor who wants to resell. If a redemption period is still running, someone else may still have a right to buy it back.

Here's how you might say it:

Script (to your buyer): "This home sold at a foreclosure sale recently. In some states, someone can still buy it back for a while after that sale. I don't know yet if that applies here. Before you put money down, I want the title company to confirm it. I'm not an attorney, so I'd also like you to talk with a local real estate attorney. Then you'll know when the seller can actually give you clear title."

076. What should you check before you list a foreclosed home?

Ask: Can my seller give clear title now, or only after a redemption period ends?

Check: The title company, plus the seller's asset manager or attorney. An asset manager is the person who handles the home for the bank or investor that owns it.

A bank-owned home is also called REO (real estate owned). If you're asked to list one, ask about redemption first. A running redemption period can affect when your seller can close.

Ask the asset manager for the redemption end date in writing. Then plan your listing and closing dates around it.

Script (to the asset manager): "Does any redemption period apply to this home? If so, when does it end? I want our listing and closing dates to match."

Worked example: a recently foreclosed home

This example is fictional. The amounts are made up, and the real formula comes from each state's law.

Your buyer, Sam, loves a house an investor bought at a foreclosure sale two months ago. The investor paid $210,000 at the sale. It's now listed at $265,000.

You call the title company. They say a redemption period still applies. A local attorney gives you the end date and a rough redemption amount.

So $210,000 plus $4,200 plus $1,800 is $216,000. Say someone with the right pays that before the deadline. Then the investor may not be able to sell to Sam.

Now Sam can choose. Sam can wait, keep looking or make an offer on terms your broker and Sam's attorney approve.

What a redemption period doesn't do

• It doesn't exist in every state. Some states have no general right after the sale.
• It doesn't stop the foreclosure sale. It's a chance to buy the home back after the sale.
• It doesn't give the home back for free. The person redeeming has to pay what the law requires.
• It isn't always the same as the right to stay. Staying after the sale is its own state-law question.

Naming traps

• Equitable redemption and statutory redemption are different. Equitable redemption (the equity of redemption) comes before the sale. The owner pays off the whole debt to keep the home. Statutory redemption comes after the sale. A state law may let an eligible person buy the home back.
• "Foreclosed" doesn't always mean final. A home can be sold at auction while a redemption period is still running.
• "Redemption period" isn't a move-out deadline. Ask about the right to redeem and the right to stay as two questions.
• "The bank owns it" may not be true yet. The buyer at the sale could be an investor, and title may not be final.

Practice: what would you do?

Here are five fictional situations. Decide what you'd do, then check the answer.

1. Your buyer wants a home that sold at auction last month. What you'd do: Ask the title company if a redemption period applies. Suggest a local attorney.
2. A seller in foreclosure asks if they can still "redeem" before the auction. What you'd do: Point them to a real estate attorney. Also suggest a free housing counselor approved by the U.S. Department of Housing and Urban Development (HUD). You can explain that paying off the whole debt before the sale is called equitable redemption.
3. You're asked to list a bank-owned home. The asset manager isn't sure if a redemption period ended. What you'd do: Ask for the end date in writing. Confirm it with the title company.
4. The title report shows an IRS tax lien behind the mortgage. A title report lists the owner and any liens on the home. What you'd do: Ask the title company if a federal redemption window applies, and how long it runs.
5. The former owner still lives in the home. Your buyer wants a showing tomorrow. What you'd do: Talk with your broker and the seller about the occupant's rights and proper access first.

Next step

If you're working a foreclosed home like this and get stuck, reach out. We're happy to help.

Reach out to the KWDS team

Who we are

KW Default Solutions (KWDS) helps Keller Williams agents find and handle listings tied to default. That includes homeowners behind on the mortgage, short sales, bank-owned homes and homes owned by companies or investors. We also train agents to do this work. Most of our opportunities are for Keller Williams agents.

General U.S. real estate education, not legal or tax advice. Redemption rules vary widely by state and by case, and all examples are fictional. Check every home with a local real estate attorney or title company.

Sources:

• Cornell Law School LII Wex: Right of redemption
• Cornell Law School LII: 28 U.S. Code § 2410, Actions affecting property on which United States has lien
• CFPB: How does foreclosure work?
• CFPB: How long after foreclosure starts will I have to leave my home?
• Cornell Law School LII: 26 U.S. Code § 7425, Discharge of liens
• HUD: About housing counseling