- Not all states offer a right of redemption to homeowners. Even in states that do allow homeowners to redeem their homes, it does not apply to all types of foreclosures. In most cases, the foreclosure must be executed judicially, which means through the court. The length of time a redemption period lasts will also vary. For example, in Florida, homeowners have until the day of the sale to redeem. In Kentucky, a homeowner has one year to redeem the home. Other states do not have a statutory redemption period. The court determines the length of the redemption period on a case-by-case basis.
- The amount a homeowner is required to pay to regain ownership of the home is called the redemption price. In most states, the redemption price is equal to the winning bid or the amount remaining on the loan. A homeowner is responsible for all associated fees, outstanding taxes and court costs. Additional fees can also apply, including interest to the buyer. Homeowners will need to contact the court to determine the exact amount of the redemption price.
- An intent to redeem the home must be filed at the local courthouse before the redemption period expires. Proof of ownership, such as a deed, must be submitted along with the petition. A homeowner may also need to show proof of funds. After the petition is approved, the homeowner will need to pay the entire redemption price in the form of cash or a certified check. The payment must be made on or before the final day of the redemption period. After payment is made, the foreclosure sale is annulled.
- A buyer who purchases a home through a foreclosure auction should research state foreclosure laws to determine if the former homeowner has the right to redeem the property. Avoid renovating or investing money in the home during the redemption period. If a homeowner abandons the home during the foreclosure, the redemption period can be shortened.
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