Foreclosure buying timeline
The timeline for your foreclosure purchase can vary immensely state to state. In almost every case, if a homeowner misses three payments, the lender can and will foreclose on the homeowner.
It can often take up to 3 months for the lender to foreclose the home primarily because the homeowner has the right for most of that time to make their loan whole. These rights are built into law to make it more fair for homeowners who have gotten into trouble.
Once a home is foreclosed on, the lender will put it up for auction. If you purchase a home at auction, you still need to do a closing. The closing, in this case, usually only takes a few hours, because you are required to make a substantial cash down payment or a full cash purchase.
If a home doesn’t sell at auction, it is either sold via a real estate broker or directly by the bank. In this case, the closing is more akin to a normal home sale. It can take a month to complete a purchase, simply because there isn’t a need to rush and the buyer is often working with a mortgage company.
It’s important to not make the mistake of thinking that a foreclosure purchase is as simple as signing on the dotted line. It takes time to close the paperwork and often for the lender to remove the current homeowners.