What Do You Do When Your House Is Sold in Foreclosure?

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The pit in your stomach grows deeper when you realize that the house you love and have put so much of yourself into has been sold at a foreclosure auction. True, you’ve been living there without paying the mortgage for many months, and refinancing wasn’t possible, so your choices are slim. But all is not lost. The new owner, usually the original lender, can offer you an incentive to leave. Or you can wait for the unpleasant eviction process to unfold.

Cash for Keys

Many lenders, finding themselves owners of real estate, offer the former residents an incentive to move rather than enter into another costly legal battle known as eviction. If you’ve maintained your home, haven’t taken out any of the appliances or other components of the home, and agree to leave the property within a specific time, you can be offered cash as an incentive to leave peacefully. The amount varies, according to the lender. Negotiate with the lender, agree to cooperate and ask for a fee that enables you to relocate without difficulty.


Lenders have already been through a legal process foreclosing on the house, and are geared up for another -- eviction. If you’re the former owner, you’ll be served with a Notice to Quit, giving you three days to move everything out. If you don’t leave, the new owner files a complaint and a summons is delivered to your door. The legal process follows, with you responding to the complaint, attending a court session, and facing a forced eviction, court costs and the possibility of arrest.

Negotiate Exit Date

Contact the new owner of the property and negotiate a departure date. If possible, offer to pay a minimum rent until you can organize a new place to live. Stay in communication with the new owner as the more cooperative you are, the more likely they will be to offer leniency regarding move-out dates. Your maintaining the property is an incentive for them, and offering the property for sale while occupied increases its value to the new owner.


Tenants are given 60 days or longer to vacate a property, depending on local tenancy laws. Federal law protects tenants of owners who obtained government-backed loans by allowing the tenancy to continue through to the end of the lease, unless the new owner intends to occupy the premises. Tenants of Fannie Mae properties are being offered the option of continuing their leases on a month-to-month basis after they expire.