Peter

My response would be no. There are homes in a short sales and foreclosure position for over a year. Most people losing their have very little cash and they are living in the home rent free. It's also far better situation to have the homeowner in the home As many vacant homes are be severely damaged.

Good luck and success

Lou Ludwig

If the home is in foreclosure you should stay until the last minute.  Unfortunately, many foreclosure homes are damaged not only by becoming vacant, but by the former homeowner themselves,  I have seen cases of severe damage to carpets, walls  and floors, by former homeowners that were forced out.  That kind of recklessness does nothing for anyone.  The person that has to move should be considerate to future purchasers.  I can sympathize with their situation, but wanton destruction does no one any good.

Bryan, you are certainly correct about sympathy for their situation, but the destruction does no one any good!  Lou, I also agree, AS LONG AS THEY DON'T DESTROY before leaving, it is better to keep them in there to keep maintaining the home.

Lou - I concur.  It is always better for a homeowner to stay in the property for numerous reasons.  If there is no one in the property, it is likely the curb appeal of the property will decrease, as no one is maintaining it.  Also, the lender may change the locks if no one is in the property, making your listing unavailable for showing temporarily.  Third, the homeowner may be able to save up money that would have been spent on rent, and use this money to help negotiate with lenders in junior positions to increase the viability of the short sale.

Bryan - I agree. I would also add that homeowners that do not have money to move out will most likely receive what is called "cash for keys" from the lender who foreclosed on their property.

Ronald - I also agree with your comments.  I also want to add that if the lender does foreclose on a property, the lender will contact the homeowner via an REO listing agent.  This agent will then propose to the individuals living in the property that they will receive assistance in the form of moving out money provided that they leave the property in good condition.

I don't think the homeowner should move out during the foreclosure process. It's still his or her home.

Mike - You are absolutely correct.  I might add that the only time it may be better for the homeowners to move out is if they want to start renting while their credit is still relatively good.

I didn't know that was how it worked, but at least that is an incentive NOT to have a foreclosure destruction party.  I'm saddened by all the foreclosures, but I don't like to see them leave AND destroy before leaving.

Ronald - Yeah, it's a real shame when people purposefully damage a house just because it's going to be foreclosed on.  In all honesty, the type of people that would do that would probably not be cooperative with any efforts to sell the property.

I wish cash for keys was always an option, but I have seen many times when the option is not offered and the homeowners are left with an insufficient amount of time to find new lodging. 

I always advise homeowners to save while they are living rent free, and to investigate all options in case a short sale in not sucessful and they do lose the home at Sheriffs Sale.

Dawn - Great post.  We never advise our clients to depend on the lenders providing them a cash-for-keys incentive, but it has been our experience that lenders will offer such incentives more often than not.  For those that are not offered such incentives, we also advise them to save money if possible for moving out.

The homeowner should stay in the property as long as possible to avoid activation of the abadonment clause in their mortgage or deed of trust.  Additionally, there are issues related to the homeowner insurance when a property sits vacant too long.

If the homeowner has already made other arrangements then I suggest having the dialogue with the lender(s) involved so everyone is aware that the homeowner has not abaondoned the property and you are actively marketing the property for sale.

Bryan - Good post!  I agree, it is always a good idea for the homeowner to stay in the house to avoid the whole abandonment issue.  This also avoids the possibility of the bank changing the locks of the house, which they tend to do on vacant houses.

Stay in the house and save, save , save. Clients should keep in mind that although they can save by not having to pay rent there credit is trashed so renting a new home might be difficult and require a larger deposit so use the time to plan a head and not stick their head in the sand and pretend the inevitable will not happen.

Bryan,

I talk to many homeowners who feel guilty staying in the house without paying anything.  I've told them that I've owned several mortgages and when we have foreclosed, it actually makes it cheaper on us as lenders if the homeowner stays in the house, for the same reasons listed above, less vandalism and less upkeep.  The condition on that is that they leave the home in good condition. 

Stay- agents give homeowners money to leave. I give cash4keys (500), clean up, take all your personal things and leave.