Redemption Period in real estate is the legally defined span of time during which a homeowner who has defaulted on mortgage payments or faced foreclosure can reclaim their property by paying the debt owed plus fees and interest. This “right of redemption” gives a final opportunity to stop foreclosure or buy back a home, though specifics depend heavily on state law and the type of foreclosure.
1) Missed payments trigger the foreclosure process (commonly after 90–120 days). 2) During the redemption period the homeowner may pay the full mortgage balance, accrued interest, foreclosure costs and fees to redeem the property. 3) In states with a post-sale redemption right, the prior owner can reclaim the property even after an auction by paying the auction price plus expenses to the buyer or lender. 4) If the homeowner cannot redeem, ownership remains with the buyer; in some jurisdictions the former owner may be able to sell their redemption rights if allowed by law.
Redemption periods vary by state and by whether redemption occurs before or after a sale: some states offer a pre-sale period (for example, California historically provides up to one year before sale), while others allow post-sale redemption (for example, Michigan gives six months after a sheriff’s auction). The difference affects timelines for auctions, investor purchases and borrower options.
- Common lengths: about six months in many places, but can be as short as one month in cases of abandonment or severe disrepair.
- Extended terms: agricultural properties or situations where a large portion of the loan has been repaid may receive longer periods (sometimes up to one year).
- Special rules: some states (and specific property types, like commercial real estate in Wisconsin) tie redemption to court confirmation of a fair sale, which affects when a lender can finalize a sheriff’s sale and pursue deficiency actions.
- For homeowners: redemption protects against immediate loss of property but is difficult to exercise in practice because it usually requires paying off the entire mortgage and related costs at once.
- For buyers/investors: a post-sale redemption right means a foreclosed property purchase may be reclaimed by the prior owner within the statutory window, creating potential risk. Investors should confirm whether the state permits post-sale redemption and for how long.
- For lenders: redemption periods balance borrower protections against the lender’s right to recover debt; the existence and length of redemption rights affect timing of deficiency judgments and sale finality.
- California: a homeowner behind on payments can sometimes redeem by paying off the debt within the statutory period before an auction.
- Michigan: after a sheriff’s sale the prior owner typically has six months to buy back the property by paying the auction amount plus fees.
- Wisconsin (commercial): redemption rights and timing can hinge on court confirmation that the sale was fair, which affects when a sheriff’s sale is final and when deficiency claims may proceed.
- Agricultural or heavily paid loans: several states extend redemption periods to allow additional time for redemption in these circumstances.
Q: Can a homeowner redeem after a sale? A: In many states yes, but not all — check local law for post-sale redemption rules.
Q: What must be paid to redeem? A: Typically the full mortgage balance, accrued interest, foreclosure fees and any costs assessed by the sale or court.
Q: Can redemption rights be sold? A: In some jurisdictions a prior owner can assign or sell redemption rights, but this depends on state law.
- If you’re behind on payments: consult a local foreclosure attorney early to determine whether a redemption period applies and the exact payoff amount required to redeem.
- If you’re buying a foreclosure: verify whether the prior owner retains any post-sale redemption rights that could affect your ownership.
- Confirm state specifics: redemption rules differ widely by state and by whether the foreclosure process is judicial or nonjudicial; always check local statutes and timelines.
See also: foreclosure and sheriff’s sale.
