If Your House Is Sold At Auction How Long Do You Have To Move In California?

Facing foreclosure is a nightmare scenario for many homeowners. And we can’t blame you. Losing your home and cratering your credit is terrifying, leaving you unsure where and how to start rebuilding your life. But life circumstances have spiraled beyond your control, and now it really looks like your house is headed for the auction block.

You’re wondering what happens after. Can you still live in your house after it has been sold? And is it legal to do so?

In this article we’ll walk you through the California foreclosure process, how long do you have to move out after the auction and if there’s a possibility of extending or postponing it. We’ll also go through your options post-foreclosure so that you can navigate this trying time without feeling overwhelmed.

The California Foreclosure Process

In California, it’s highly unlikely for your lender or mortgage company to start foreclosing on your home just because you missed a single payment. Generally, they’ll just send you a reminder that the month’s payment hasn’t been received. If you miss another, you can expect a demand letter. It’s much more serious, but you can get in touch with your lender and work out a solution on how you can get current on your payments. However, if your streak extends to three months, that’s when the clock starts ticking.

Notice of Default (Day 1)

Once 90 days have passed and you still haven’t caught up with your mortgage payments, your lender can formally start foreclosing on the property by sending you a Notice of Default. California’s foreclosure process can move fast because banks and lenders have the option of not involving the courts via a nonjudicial foreclosure. Compared to the judicial option which could take years, it would only take between 4-6 months with nonjudicial. 

Waiting Period (Day 91-180)

An NoD on your mailbox is not the end of the world as there’s a further 90-day waiting period before the next step commences. During these 90 days, you can work towards curing your default by making up your back payments. If you’re not able to do so, you can explore alternative options with your lender or learn more about how our process works if you’re considering a faster way to sell and avoid foreclosure.

Notice of Trustee Sale (Day 181-200)

If nothing is done to cure the delinquency during the grace period, you’ll receive the Notice of Trustee Sale in the mail. From here, you’re rapidly running out of options as the auction is scheduled from 20 days henceforth. You can still enter into last-minute negotiations, reinstate the loan, or file bankruptcy in order to halt the process. 

Foreclosure Auction 

Otherwise, a public foreclosure auction will happen at the county courthouse. It can either be bought by a third-party buyer;or, if it fails to sell at the price sought to cover the loan, ownership reverts to the lender and becomes a Real Estate Owned (REO) Property.

Are There Ways to Extend Your Foreclosure Timeline in California?

95% of California lenders opt for a nonjudicial process owing to the speed of its resolution–in just 200 days. This might leave you wondering if there’s a way for you to fight it and extend the time before you have to surrender ownership of the home you’ve worked so hard for.

Fortunately for you, California has introduced Assembly Bill 2424 (AB 2424) which can help you avoid foreclosure altogether. By initiating early marketing and sale of properties on the brink of foreclosure, it enables you to fully repay the loan and avoid having that black mark on your credit history. This is immensely helpful because foreclosures take 7 years before they’re completely off your record, and as long as it’s there, you can have a tough time securing housing and other loans.

With this bill, you have two powerful postponement options at your disposal:

Listing Agreement

You can postpone the sale for 45 days as long as you submit a valid listing agreement with a California realtor within 5 days from the scheduled public auction. This action can only be taken once, but it can get you out of the pinch and allow you to take control of the selling process. Do note that for the listing to be considered valid, it must be with a licensed California real estate agent, and the property should be available on the MLS. 

Purchase Agreement

You can delay the foreclosure sale for a further 45 days if you have found a buyer at least 5 days from the rescheduled trustee sale date. For this to work, you must have a legitimate purchase agreement indicating that your property will be purchased at a price that is sufficient to cover the loan. As with the listing agreement above, you can only use this once.

When successfully employed, AB 2424 can extend your foreclosure timeline by up to 90 days, easing financial pressure and giving you a bigger chance of keeping your home.

What’s Your Legal Status After Your Home is Sold in a Foreclosure Auction?

If all else fails and your home ends up getting sold, the new owner will generally give you a notice to vacate within three days. You’re no longer a homeowner, but you’re not a trespasser or a squatter either. In those 3 days, you’re considered a tenant. And while there’s the common misconception that you need a rental agreement to be considered a tenant, it’s an exception in this case, and you’re considered a “tenant at will” or a “tenant by sufferance”.

What Happens Next if You Don’t Want to Leave?

But what if the 3 days are up, and you’re still not finished cleaning out your personal belongings? Or, maybe, you’re considering not handing over the property. After all there’s that famous saying that “Possession is nine-tenths of the law”! No, not so fast. Even if you’re the one in possession of the property, there’s clear and undisputed documentary evidence that you no longer own the house (i.e. the deed), and therefore the new owner will just evict you. How soon you get eviction notices depends on who’s the buyer.

Your Home is Purchased by a Third-Party Buyer

If your property ends up in the hands of a third party, such as an investor, a house flipper, or an end user, they’d likely want to gain possession as soon as possible. If you don’t move out after the three days’ notice has lapsed, they’ll file an unlawful detainer (eviction lawsuit) against you. Depending how experienced they are with evictions, it can be as soon as the deadline expires; but if they’re new to it, you can probably expect a delay, although you shouldn’t bank on that. Once eviction is granted, a sheriff will come and forcibly remove you. Therefore, it’s better to move out without resistance to prevent hassles to everyone involved. 

Your Home Ends Up as a Real Estate Owned Property (REO)

If no one outbids your lender’s credit bid, the bank or your mortgage provider ends up with the title to your property, turning it into an REO. If you insist on staying beyond the three days, they’ll quickly move forward with the eviction. You can’t expect that they’ll cut you slack as they’re very experienced in this business, so it’s still better not to overstay and move out before further action is taken against you.

Can You Get  Paid for Moving Out?

Sometimes, you may receive a lump sum offer if you move out at a certain date and if you leave the property in great condition. Also called “cash for keys”, this can be a valuable lifeline as you rebuild your life. If no such offer comes with the termination notice, it can’t hurt to negotiate this with the new owner. 

In a “Cash for Keys” deal, it’s possible to receive up to $20,000. It might seem like a large amount, but it’s still cheaper compared to the expense and time that a lengthy legal eviction would entail. Furthermore, since you’ll be incentivized to leave, you’re more likely to leave the property in a desirable condition for the next occupants.

What are the Ways to Avoid Foreclosure?

Prevention is always better than cure, so here are some of the things you can do to avoid foreclosure altogether. If foreclosure seems inevitable and none of the options above are workable, you can get ahead by selling your property before the lender takes action. Many homeowners choose to work with we buy houses in California companies to sell quickly, avoid repair costs, and move forward without delay.

Get Current on your Mortgage ASAP

The simplest and fastest way to avoid the hassles of a foreclosure is to catch up on your payments as soon as possible. Take out another loan, borrow money from friends or family, or sell other assets to cover the shortfall before the Notice of Default appears in the mail. 

Loan Refinancing

You can also consider refinancing your loan. In this way, your existing loan is paid off by replacing it with a new one. A caveat though: the new loan will be based on current market conditions, so it could mean saying goodbye to that favorable interest rate that you’ve secured before.

Loan Modification

If your financial setback looks like it could be for the long-term, you can request your lender to modify your loan. There are certain criteria that you have to satisfy, such as a divorce, job loss, or a medical emergency, along with a good credit score, but this route will give you lots of financial wiggle room that’ll pull you away from the brink of foreclosure. Below are some loan modification options that are available:

• Variable-rate mortgage to fixed-rate conversion
• Reduction of principal
• Loan term extension
• Postponement

Pre Foreclosure Sale

If foreclosure seems inevitable, and none of the options above look promising, you can get ahead by selling your property before your lender initiates it. Doing so would give you control over the selling process, and you won’t be pressured into doing a short sale. Selling pre-foreclosure gives you an out without damage to your credit. However, as with everything, you have to check if your loan agreement allows it so as not to run into any legal issues.

Short Sale

If your house is underwater, which means you owe more than what it’s worth, sometimes short selling is your only recourse. A short sale is selling a property for less, so essentially, your lender won’t be getting back the amount that they had loaned you, hence getting their permission is required. With this, your debt will be forgiven and you’ll certainly walk away with zero cash, but it’s still better than getting foreclosed on. 

Deed-in-Lieu of Foreclosure

Alternatively, you can willingly turn over ownership of your home back to your lender to avoid foreclosure. This is called a deed-in-lieu of foreclosure, or a friendly foreclosure, and it’s recommended if you have little to no equity in the home. It’s because when you sign off your ownership rights back to your mortgage provider, you also relinquish any and all equity that’s been built up over the years. And since you’ll also be getting zero cash from this transaction, you can negotiate a relocation assistance or a cash-for-keys arrangement to help you back to your feet.

File Bankruptcy

This option is considered a last resort. Once you declare bankruptcy, an automatic stay is ordered on your property, keeping it out of foreclosure. The next steps are defined by the type of bankruptcy that you file: if Chapter 7, all your assets will be liquidated to pay your creditors in order of priority; and if it’s Chapter 13, you’ll develop a repayment plan to service your debts within 3-5 years.

Tenants’ Rights in a Foreclosure

If you don’t own the home, but your landlord gets foreclosed on, you might be worrying what comes next for you. Are you going to be thrown out into the streets? Will they seize your stuff and lock you out of the place you’ve called home for years? 

Don’t worry! 

California law imbues tenants with rights and protections that give you ample time and options to figure out the next steps–on your terms. 

In general, the winning bidder must honor existing tenancy agreements and must give you a minimum of 90 days before you have to move out. Your security deposit must also be returned by the new owner if your former landlord didn’t. It’s also illegal for the new owner to just change the locks without a court order. If there are valid grounds for eviction, it must go through the legal process; they cannot do a self-help eviction. If you’re ready to explore your options or need a fast solution, fill out our form below or get in touch with our team. We help homeowners sell your house fast for cash in Pasadena, offering fair cash deals and a simple process designed to reduce stress and uncertainty.

Closing Thoughts: How Long Before You Have to Move Out Your California Home is Sold at Auction?

After the hammer falls and the deed to your house has been signed off to the new owner, you won’t be required to move out in a jiffy. Generally, you’ll have a three day notice to clear out your belongings and move out voluntarily. You can also negotiate for more time if you feel that the deadline isn’t sufficient, or you can work out a “Cash for Keys” deal . These options are better than getting evicted–not just for you, but for the new owner as well.

Here at Eazy House Sale, we’re passionate about helping home owners who are financially struggling to get out of the situation they’re in. If you’re missing mortgage payments and inching closer to foreclosure, you can get ahead by selling your property. And here’s where we come in, with our fair, and honest cash offer–no strings attached! We’ll even cover closing costs, so you don’t have to worry about that.

If you’re interested, fill in our form below with your address, email, and phone number.

You can also reach out to us if you have any questions or want to explore your options—we’re here to help every step of the way.