Selling a House in Foreclosure in Minnesota: Your Timeline, Your Options, and an As-Is Sale

If you’ve fallen behind on your mortgage or found a foreclosure notice on your door, you’re probably scared. Two things to know right away. You likely have more time and more options than you think. And free help is available. The Minnesota Homeownership Center connects homeowners with free foreclosure prevention advisors at 866-462-6466 or hocmn.org.

I’m Troy Molde, owner of Henry Home Buyer in Lakeville. I buy houses for cash, as-is, across the Twin Cities metro. Sometimes the right answer is keeping your home. Sometimes it’s selling before you lose your equity. Here’s how foreclosure works in Minnesota, and how to sell a house in foreclosure in Minnesota if that’s your best path.

How Foreclosure Works in Minnesota

Most Minnesota home foreclosures are foreclosures by advertisement, which don’t go through a court (Minn. Stat. chapter 580). The lender chooses the method, and some use a court case instead (chapter 581). The general steps:

1. Missed payments. Under federal rules, a servicer generally can’t start foreclosure until you’re more than 120 days behind (12 C.F.R. § 1024.41(f)).
2. Counseling notice. For an owner-occupied home with one to four units, the lender must tell you that free foreclosure prevention counseling is available before it records the notice that starts the foreclosure (Minn. Stat. § 580.021).
3. Notice of sale. The lender publishes notice of the sheriff’s sale for six weeks, and the notice must be served on the people living in the home at least four weeks before the sale (§ 580.03). It comes with a notice explaining your redemption rights and where to get help (§ 580.041).
4. Sheriff’s sale. The county sheriff auctions the property, often to the lender.
5. Redemption period. After the sale, you usually have six months to “redeem” (§ 580.23). You can generally keep living in the home during that time.
6. End of redemption. If the home isn’t redeemed or sold by then, you have to move out, or the winning bidder can file an eviction.

When the redemption period is different. It can be 12 months in some situations, such as when the amount owed is less than about two-thirds of the original loan, for some older mortgages and some larger or agricultural properties, and for reverse mortgages (§ 580.23, subd. 2). It can be cut to five weeks if a court finds the house abandoned (§ 582.032), or if the owner of a homestead chooses to postpone the sheriff’s sale by five months under § 580.07, which shortens the redemption period to five weeks in exchange. Check your notice, or ask the sheriff’s office or a counselor, to confirm your dates.

Please note: I’m a home buyer, not an attorney or housing counselor, and nothing on this page is legal or financial advice. Foreclosure deadlines are strict. Talk with a Minnesota attorney or a HUD-approved housing counselor about your situation before you make decisions or sign anything.

Your Options Before and After the Sheriff’s Sale

• Work it out with your servicer. Ask about a loan modification, forbearance or repayment plan. Under federal rules, a complete application sent more than 37 days before the sale gets important protections.
• Reinstate the loan. Before the sheriff’s sale, you can stop the foreclosure by paying the past-due amount plus allowed costs and fees (§ 580.30).
• Postpone the sale. This buys five months but shortens your redemption period to five weeks. Weigh it with a counselor.
• Redeem after the sale. Pay the sheriff’s sale amount plus interest and allowed costs, often by refinancing. It can be less than you owed before the sale.
• Short sale or deed in lieu. If you owe more than the house is worth, the lender may accept less or take the deed back.
• Sell the house. You can sell before the sheriff’s sale or during the redemption period.
• Bankruptcy. This can pause a foreclosure. Talk with a bankruptcy attorney.

Selling Before the Sale or During Redemption

If you have equity, selling is often how you protect it. Before the sheriff’s sale, the sale pays off your mortgage at closing. During redemption, it has to cover the redemption amount (the winning bid plus interest and allowed costs) and any other liens. Whatever is left is yours.

Timing matters. The title company needs a current payoff or redemption figure, and closing has to happen before your deadline. A cash buyer has no loan approval to wait on.

A word of caution, which Minnesota’s own foreclosure notice gives too: after a sheriff’s sale, people may ask you to sign your house over for little or no money. Before you sign anything, find out what the house sold for and what it would take to redeem. Get offers in writing, run them by a counselor or attorney, and only sign a deed at a title company closing.

How I Can Help

• As-is. No repairs, cleaning or showings. Take what you want and leave the rest.
• No agent fees. You pay no commissions. I pay the closing costs, including the state deed tax, and the fee for any city point-of-sale inspection that’s required (about 11 local cities require one).
• Self-funded. No lender, appraisal or financing contingency.
• A written offer. You or your attorney can review it before you sign. If the inspection turns up something new, the price can change, and I’ll explain why.
• One point of contact. You deal with me, and we close with a trusted title company. If you’ve moved out of state, you don’t need to attend closing. The title company can arrange a remote notary.

If the homeowner has passed away, the estate may have options too. See my guide to selling a house in probate in Minnesota.

When a Cash Sale Isn’t the Best Fit

If you want to keep your home, start with the Homeownership Center and your servicer, not me. If the house is in good shape and you have time before your deadline, listing with a good agent may net you more. I’ll tell you that if it’s true.

What to Expect From My Cash Offer

Selling your house as-is to me is a lot like trading in a car at a dealership. You’ll get less money than you would selling it yourself, but it’s a lot faster and easier.

My cash offer will be quite a bit lower than what someone buying the house to live in would pay. That’s because I’m buying it to fix up and resell for a profit, just like you see on the TV shows. In exchange, you skip the repairs, the cleanout, the showings and the agent fees.

If your house is in good shape and getting top dollar matters most, listing with an agent will be the better choice. I’m happy to tell you honestly which way I think makes more sense.

Frequently Asked Questions

How long is the redemption period in Minnesota?

Usually six months after the sheriff’s sale. It can be 12 months in some cases, or five weeks if the house is found abandoned or the sale was postponed by the homeowner.

Can I stay in my house during the redemption period?

Generally, yes, until the redemption period ends. If the home isn’t redeemed or sold by then, you’ll have to move out.

Can I sell my house after the sheriff’s sale?

Yes. You can sell during the redemption period, as long as the sale covers the redemption amount and other liens. Anything left over is yours.

What if I owe more than the house is worth?

You may need the lender to approve a short sale. A HUD-approved housing counselor can walk you through it for free.

Talk With Troy About Your House

Henry Home Buyer is a local home buyer based in Lakeville. If you’re facing foreclosure anywhere in the Twin Cities metro, call me. You’ll get honest answers, a written offer and no pressure.

Call Troy at (612) 430-8822 or fill out the form on this page to get started.

Disclaimer: Henry Home Buyer is a real estate investment company, not a law firm or housing counseling agency, and Troy Molde is not an attorney. The information on this page is general information about the Minnesota foreclosure process, provided for educational purposes only. It is not legal, financial or tax advice, may not reflect the most current law, and does not create an attorney-client relationship. For advice about your situation, please consult a licensed Minnesota attorney or a HUD-approved housing counselor, such as an advisor through the Minnesota Homeownership Center.