Throughout this site, you’ll find advice for saving your home from foreclosure. Sometimes, you can’t save it and the process runs its course, but it’s not the end. You still have to pack up and leave.
When you don’t voluntarily surrender a home, a lender has to go through an eviction process following the foreclosure. Some homeowners that have no place else to go, drag out the process for as long as possible, which can take a month or more.
Although the lender now owns the property, it still doesn’t have possession of it. It’s harder to show the home to prospective buyers. Recognizing this fact, some lenders offer cash for keys, a cash settlement to vacate by a certain date.
In most cases a lender will get a property back in better shape than it would be than from a disgruntled former owner or tenant. All too often buyers of foreclosed property report damage ranging from removal of copper pipes, to excrement spread as a parting gesture. Accepting a payment on the spot for a set of keys seems to forestall some of this vengeful retribution.
Cash for keys can be used for moving expenses or a deposit on a rental, for which you’ll need plenty of money, because your credit will be shot. It’s a last ditch settlement that can’t be reversed. An offer of cash for keys can be made to the principal borrower or a rental tenant in income property.
Some lenders offer one percent of what it assumes the selling price of the home will be, but if you’re given such an offer, feel free to negotiate. These one-time payments can be up to several thousand dollars.
Again, try to avoid this action as much as possible, but know that with cash for keys, if you lose your home, your very next house won’t necessarily be a packing crate.