A desperate call from a homeowner who had gone completely through the Foreclosure process, but was still in his home prompted me to write this post.
"Cash For Keys" in simple terms is this: Cash payment of one thousand to three thousand dollars is given to the occupant for leaving the home in good condition. (See the Example below).
After a home has been foreclosed the owner/Bank may negotiate "Cash For Keys", with either a Homeowner or a Tenant occupying a foreclosed home.
Terms are negotiable and the terms are different for each bank offering "Cash For Keys".
Here are some tips if you find yourself in the situation of occupying a foreclosed home and wish to take advantage of a "Cash For Keys" agreement. This is not meant to be legal advice. For legal questions about your specific situation seek advice from an attorney who knows bankruptcy and foreclosure law.
1. Wait until the Bank is on title as the owner. To try to negotiate before can result in getting nothing if for some reason such as a pending bankruptcy is initiated by the former owner.
2. If dealing with a representative of the bank such as a listing agent, potential listing agent or even someone posing as an agent then be sure to get the name and telephone number of someone at the bank so you can be sure you are dealing with an actual representative of the bank.
3. Get everything in writing. Below is an example of a "Cash For Keys", agreement. Please note, "Cash For Keys", it is not usually moving money to help the occupant move out. In fact the Cash is only given after an inspection is done to make sure that all personal property is gone, the property is in tact with all fixtures and appliances, and swept broom clean.
4. Take pictures of the home and e-mail them to the bank contact after you have cleaned it and removed all of your personal items so that you can document how you left the home. This is very important due to the fact that there are unethical scam artists who have been known to mess up a home, or steal fixtures and applicances and indicate that the occupant did not leave the home in good condition.
5. Remember that the terms are negotiable as far as the cash settlement amount and the timing of the complete move out. When negotiating, be cooperative with the bank to get the best terms.
EXAMPLE OF A "CASH FOR KEYS AGREEMENT":
Cash for Keys Agreement
This agreement is made this __________day of __________________, 20_____ between _______________________________ ABC BANK (hereafter referred to as owner) and Occupants ____________________________________________ (hereafter referred to as occupant).
1) Occupant is currently residing at _____________________________________________________________,
a property obtained by the owner through foreclosure proceedings.
2) Occupant agrees to vacate the premises on or before ______________________________________________.
3) Occupant agrees to leave the property free of all debris, trash, and personal property and in broom clean condition.
4) Occupant agrees not to remove, allow the removal, or damage in any way, the fixtures, appliances or any other part of the property.
5) Owner agrees to pay Occupant the sum of $ _______________ upon completion of the terms of this agreement and inspection by Owner's agent. A check for this amount will be made out to Occupant(s) and
will be held by Agent until the property has been inspected.
6) Owner agrees payment will be made within two business days of satisfactory inspection. Payment will be made directly to Occupant.
7) All parties agree that this agreement is null and void if Occupant does not meet the terms of this agreement.
8) Occupant agrees that he hereby waives any protection allowed under all applicable ______________________
State Laws, if he/she does not fulfill the terms of this agreement. Occupant further agrees to be solely responsible for Owner's legal fees should any be required to regain possession of this property.
Occupants forwarding address: ______________________________________
Agent's Name and Address: _____________________________________________
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