Local, state and federal laws can prolong your stay in a bank-foreclosed home. Depending on how ready the bank is to sell after taking ownership, and the home's marketability, you may have as many as six months to stay in the home. If the bank is eager to sell, however, it can approach you with a cash incentive so you move within a relatively short amount of time. You might also ask the bank about making such a deal, known as "cash for keys." You must proceed with caution and carry out all of the agreement's terms to receive cash after foreclosure.
Get Cash for Keys Agreement in Writing
Insist that the bank put your cash for keys deal in writing. Read the agreement carefully and ask questions about any terms and conditions you don't fully understand. Have a skilled and experienced attorney or real estate agent clarify your responsibilities according to the agreement. You can also ask a trusted and capable family member or friend to review the written agreement and help you understand it, recommends the California Bureau of Real Estate.
Negotiate An Appropriate Amount
Cash for keys offers are generally negotiable. Offer amounts may range from several hundred dollars to thousands of dollars. The maximum amount the bank will pay depends on a few factors. Banks base amounts on the home's current value and condition, as determined by an appraisal. Offer amounts also depend on the bank's plans for the property, such as the need to quickly repair and sell a home. You may be able to negotiate a higher offer by moving out sooner than the bank requests, since an expeditious move means the bank can try to recover its losses faster.
Get Help From HUD
The Department of Housing and Urban Development offers free counseling to foreclosed homeowners. You can contact a HUD counselor to help you negotiate and evaluate cash for keys offers. HUD trains and approves housing counselors from agencies throughout the country to help homeowners and former homeowners dealing with bank foreclosure. HUD counselors can also explain the cash for keys program and determine your eligibility before you contact the bank about getting a cash incentive to move.
Spot Cash for Keys Scams
If approached with a cash for keys offer, make sure that the offer comes directly from the new owner -- the bank -- and not a scammer. Verify the identity and authority or title of the the bank's representative who is making the offer. Part of confirming the source and authenticity of a cash for keys offer involves requesting the agreement in writing.
Leave the House "Broom Clean"
Cash for keys terms require that you leave the home in "broom clean" condition. You must remove all furniture, trash and debris from the property, leave its fixtures, landscaping and components intact and sweep the home. You also must turn in all house keys and garage door openers or remotes. The bank orders an appraisal inspection to determine the home's condition before the foreclosure and inspects the home after you move out.
Secure A New Place
Rather than having three to six months to live rent-free before you're forced to move, the incentive is intended to help you relocate quickly, usually within 30 days. The short time frame requires you to find a new place quickly. The offer amount should help to offset moving expenses, however, as well as the costs of finding new housing, and possibly rental deposits and initial rent at your next residence.