As a last resort before beginning eviction proceedings, banks will often offer homeowners or leftover renters a cash for keys deal. Most of the time, though, these offers will be in the best interests of the bank, but will not help out the people living in the property very much.
Many banks will hire a real estate or property management agency to make the cash for keys offer. For example, t may be as little as $500 and two weeks to move out and turn over the home. Honestly, though, this is very little to a family who has just undergone a financial hardship.
Banks make these offers to persuade owners or tenants to leave a house without causing any damage. They reason that it costs less to pay people to move than to go through eviction proceedings in court and end up with a possibly severely damaged property.
So what is a homeowner or tenant to do if the cash for keys offer is ridiculously low? They should call the agency back and ask for more money and more time. Cash for keys deals are 100% negotiable, up to a certain reasonable point. Those who have been offered such a deal should keep in mind a few things about the situation.
First, if they destroy the property on their way out, because they are frustrated about the eviction, it will cost the bank a lot more to fix up the damage. Keeping previous owners and renters happy and the property in good condition is worth a bit of money to a mortgage company who has to sell that house later on the open market.
Second, if $500 isn’t enough for a family, they need to determine how much really will help them. $750? $1,000? In any case, they probably should not expect to get much more than $2,000, if that. But $1,000 might pay for most moving expenses and help with a deposit on a new apartment. If they need more money, the people living in the property after foreclosure should ask for it and explain the situation to the agency.
Third, homeowners can probably get 21-30 days to move out, if they ask for it. Two weeks is a small amount of time, and probably not enough to get everything out and keep the property in great condition (hint, hint). But if the borrowers or tenants need more time than was originally offered, they can certainly ask for it and can probably get it easily.
Anyone who has been extended an offer should keep in mind that a cash for keys deal is negotiable with the agency that offered the money and the lender that owns the property now that it has been foreclosed. All of this is allowed (including extremely low offers), but negotiating for a better deal is also allowed.
The tenants should come up with what they want and need to move out peacefully, keeping the house in good condition. Then they can try and get it from the cash for keys agency. But it is important to be reasonable, as well. Any attempts to take advantage of the bank’s financial resources will probably just result in the offer being rescinded and the eviction process started in court.
The lenders who own properties after foreclosure would rather pay the former owners or renters $1,000 and give them 3 weeks to move out to avoid damage to the house. But the banks would also rather evict and sell a damaged house than give foreclosure victims $5,000 and 6 months to get out. So people living in such properties need to figure out how much will help them move out and ask for a reasonable amount. They will probably be pleasantly surprised with what they can get.