What is an upset bid in a foreclosure?

An upset bid in a foreclosure is a higher bid than the original winning bid in a foreclosure sale. This bid is placed during the Redemption Period, which is a certain amount of time after the foreclosure sale during which a former homeowner can redeem their home. If a third party places an upset bid, this bid must be higher than the original winning bid in order for the upset bid to be accepted. In California, the Redemption Period is six months from the date of the foreclosure sale. During this period of time, a former homeowner has the option to redeem the home (by paying what is owed) or another bidder can place an upset bid. If an upset bid is placed, the former homeowner must pay the upset bid amount in order to redeem their home. If the former homeowner is unable to redeem the home by the end of the Redemption Period, the original winning bidder or the upset bidder will have the right to ownership of the home. As a result, upset bids can provide an opportunity for a former homeowner to redeem the home, or a third party to acquire the home in a foreclosure sale.

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