Updated December 2025 | 8 min read

What Happens After a Foreclosure Auction in California?

If your California home has been sold at a foreclosure auction, you're likely wondering what comes next. While losing your home is incredibly difficult, understanding the post-auction process can help you plan your next steps and protect your rights.

The Foreclosure Auction Process in California

In California, foreclosure auctions (also called trustee sales) typically happen on the courthouse steps or at a designated location. The property is sold to the highest bidder, which is often the lender if no outside bidders meet the minimum price.

Who Buys at Foreclosure Auctions?

• The Lender: If no one bids higher than the outstanding loan balance, the lender takes ownership
• Investors: Real estate investors looking for below-market properties
• Owner-Occupants: Occasionally, individuals looking for a primary residence

What Happens Immediately After the Sale

1. Transfer of Ownership

Once the auction is complete, ownership transfers to the winning bidder. A Trustee's Deed Upon Sale is recorded with the county, officially documenting the new owner.

2. You're Still in the Home

The sale doesn't mean you have to leave immediately. California law provides specific procedures the new owner must follow before you can be removed.

3. No Redemption Period

Unlike some states, California does not have a post-sale redemption period for non-judicial foreclosures (the most common type). Once sold, you cannot "buy back" the property.

The Eviction Timeline in California

After the auction, the new owner must go through the legal eviction process to remove you from the property. Here's what to expect:

Step 1: 3-Day Notice to Quit

The new owner must first serve you with a 3-day notice to quit. This gives you 3 days to voluntarily vacate the property.

Step 2: Unlawful Detainer Lawsuit

If you don't leave after 3 days, the new owner files an unlawful detainer lawsuit. You'll receive a summons and complaint and have 5 days to respond.

Step 3: Court Hearing

A court hearing is typically scheduled within 20 days. The judge will review the case and issue a ruling.

Step 4: Writ of Possession

If the new owner wins, the court issues a writ of possession. The sheriff then has 5 days to post a notice giving you a final opportunity to leave.

Step 5: Sheriff Lockout

If you still haven't left, the sheriff will physically remove you and your belongings from the property.

Can the Lender Sue Me for the Remaining Balance?

This is one of the most important questions homeowners ask. In California, the answer depends on the type of loan:

Purchase Money Loans (Original Mortgage)

If the foreclosed loan was used to purchase the property and you never refinanced, the lender cannot pursue a deficiency judgment against you. California's anti-deficiency laws protect you.

Refinanced Loans or HELOCs

If you refinanced or took out a home equity line of credit, the lender may be able to pursue a deficiency judgment for the difference between what you owed and what the property sold for.

Time Limits

Lenders have 3 months after a judicial foreclosure to seek a deficiency judgment. For non-judicial foreclosures of non-purchase money loans, they generally have 4 years.

"Cash for Keys" Agreements

Many new owners and lenders prefer to avoid the eviction process. They may offer you "cash for keys" - a payment in exchange for vacating the property quickly and leaving it in good condition.

Typical Cash for Keys Offers

• Range: $1,000 - $5,000 or more
• Conditions: Leave by a specific date, clean the property, hand over all keys
• Benefits: Avoid eviction on your record, receive moving money

Should You Accept?

Cash for keys can be a good option if you need moving funds and want to avoid a formal eviction. However, don't accept an offer that doesn't give you enough time to find new housing.

Impact on Your Credit and Future

Credit Score Impact

Foreclosure typically drops your credit score by 100-150 points and stays on your credit report for 7 years. However, you can begin rebuilding immediately.

Buying a Home Again

• FHA Loans: 3-year waiting period
• Conventional Loans: 7-year waiting period (may be less with extenuating circumstances)
• VA Loans: 2-year waiting period

Renting After Foreclosure

Many landlords will rent to people with foreclosures, especially if you can explain the circumstances and show stable income. Having a larger deposit or co-signer can help.

What About Personal Belongings?

California law protects your personal property after a foreclosure sale:

• The new owner must give you reasonable time to remove belongings
• They cannot throw away or sell your property without proper notice
• If items are left behind, they must store them for 15-18 days

Getting Help and Moving Forward

While foreclosure is difficult, it's not the end. Many people successfully rebuild their financial lives and even become homeowners again. Here are resources that can help:

• HUD-Approved Housing Counselors: Free counseling for post-foreclosure planning
• Legal Aid: Free legal help for low-income Californians
• Credit Counseling: Help rebuilding your credit

Key Takeaways

• You don't have to leave immediately after the auction - there's a legal eviction process
• California's anti-deficiency laws may protect you from owing more money
• "Cash for keys" can provide moving funds and avoid formal eviction
• You can buy a home again after waiting periods (2-7 years depending on loan type)
• Many landlords will rent to people with foreclosures on their record