Cash for Keys Agreements - Help Homeowners Going to Foreclosure
On the other hand, landlords can negotiate cash for keys agreements when they want to get rid of tenants occupying their rental households. The tenant can receive a cash incentive to move out of the property the landlord can save the costs of eviction.
In both cases, the aim is to remove residents at a lower cost than that of the legal alternative.
Most homeowners who are under the stress of imminent foreclosure wonder if getting a cash for keys agreement is the right move. The answer depends. A homeowner should always consider the property that he is relinquishing before signing the cash for keys agreement; depending on the amount of equity the property posses, there might be better options.
A cash for keys agreement is always voluntary. The lender decides whether to offer the cash for keys agreement and, it is up to the borrower whether to accept it or not. Nevertheless, if you are facing a foreclosure, you will have to vacate the property at some point.
What to consider before accepting a cash for keys agreementAs a homeowner facing foreclosure, you must ensure that the deficiency judgment is not your responsibility. This is because, without it, the lender may still come for you to make the loan whole. Such a case may create unnecessary financial burdens after vacating the property. Besides, you must consider certain factors before accepting the cash for keys agreement, they include:
The convenience of you moving out of the propertyFor you to vacate, you should examine the current situation that you are in and establish whether moving out is the right option. For instance, moving out before the end of a school year may create problems for your family. Vacating may be of benefit to the lender, but not for you.
Property Vacating CostsWhen moving, there will exist various costs such as security, deposits, the cost of the moving company, utility deposits, taking leave from work, address changing among many others. If the cash for keys that your lender offers is less compared to the sum of the costs associated with moving, then vacating may not be the ideal move.
Alternatives to “Cash for Keys” Agreements
There are ways in which you can prevent the foreclosure process from happening. For instance, you can file for bankruptcy or try to sell your house fast. Even though going through a foreclosure is usually difficult, you should always find the right institutions or attorney to help you in establishing whether the cash for keys your lender is offering is the right one as well as the terms of negotiation.