1. Very effective if you have good people skills and the folks aren't completely whacked.
2. Expect to pay 1-2 months rent. Most folks need 1st and deposit to move. Start at half that.
3. Some investors do avoid them. That may mean you can get a better deal, so its a tradeoff. The key is to know.
4. While a different address is a good clue, it isn't enough. Lots of "investors" bought as owner-occupants to get better rates, and as such used the property address as their personal address. Only sure way I know is to ask. Either the occupant, or sometimes a neighbor. Tools like Accurint or Merlin Data can also help if you want to spend the time and money really digging into who might live there.
Answered by Sean
Thu May 27th 2010 at 12:36am
Another successful strategy that I have seen used frequently is to offer a certain sum, say for example $2,000, if the house is vacated in one month. Then further agree to pay an additional $500 for every week the house is vacated sooner than that. The occupant then has incentive to move out sooner.
Also, you may want to have the occupant sign a written "Relocation Assistance Agreement" (a.k.a. cash for keys agreement) which includes a provision that the house will be turned over in good condition, broom swept clean and with all appliances and fixtures in place. While actual enforcement of the written agreement may become a procedural challenge, it will make expectations and obligations clear .
Answered by Mark
Thu May 27th 2010 at 7:21pm
Here's a novel idea: leave the tenants alone and let them stay as provided under federal law. Realtors are playing with fire by harassing tenants, lying to them about their rights, and prematurely displacing tenants from their homes, which happens all too frequently. And for what? So that the homes can sit vacant after tenants move. Don't forget -- tenants are innocent victims in this foreclosure crisis.
Sean's comment that "If the folks have two pieces of furniture and look like they could really use some cash, you might want to start with offering $500 if they are out tomorrow" is particularly troublesome. Sean, can we assume that along with the $500 offer you are informing the tenants of their right to stay for 90 days or through their lease term?
Answered by Dean
Thu May 27th 2010 at 11:29pm
We have purchased 9 homes at the auction in the past 13 months. 3 had tenants. It is my opinion, that the tenants are real victims in the foreclosure mess. They have been lied to by their deadbeat landlords who all continued to collect rent and not pay the mortgage, taxes or HOA fees. But we need them to leave and the sooner the better. I am not there to be their legal counsel. But we do treat them with respect and fairly. In the real world, the tenants know they have to leave and the offer of cash for keys has worked to their advantage everytime (for us). As Sean says, it is a negotiation. They don't need the law if they get what they need. As Mic said, "you can't always get what you want, but if try, sometimes, you get what you need". Be fair and respectful to these poor soles who are the victims. They will be grateful and happy.
Answered by Richard
Wed Jun 9th 2010 at 7:35pm
Would you let the original owners of the foreclosed property, become renters of the house if they expressed a strong interest not to move and were willing to sign a lease with deposit etc? Or would you just kick them out to avoid problems in the long run?
Answered by chris brown
Wed Dec 1st 2010 at 2:08pm
In negotiations with a bank for a foreclosed single family home in Los Angeles that has a tenant. Tenant has supplied us with a "lease" signed with previous owner 2 months before home went back to bank. Lease is 3 years in length and for substantially below market value ($800 per month in neighborhood where rents are minimum $2,500+ per month) for home type and area. Everyone including broker who has listing for bank thinks the lease is forged. Is the "lease" valid or can they be evicted upon close of escrow. We will be owner/occupier. Cash for keys a good option? What are potential hazards? Also issue of now missing security deposit tenant paid at start of lease...
Any light that you can shed would be greatly appreciated.
Waiting in Hollywood...
Answered by Alex
Fri Feb 25th 2011 at 11:38am
If I were making a decision whether to agree to a cash for keys offer, I have consider the following:
1. The security afforded by state and local laws. If those don't allow expulsion after foreclosure or provide a longer notice period, you should be offered more money, as you have a greater awareness in staying in your home.
It may be more suitable to move at the end of the school year, for instance, and if your 90 days would get you to July, you might rather not move at the end of April. Yes, it is all right to say that moving at the convenience of the proprietor is not convenient for you.
2. The amount of your deposit. If the cash for keys offer is less than your deposit, it means you are giving up the variation. Do you want to do that? If the lender organizes the cash for keys agreement, it will most likely state that the agreement settles all declares you have on the lender, which means that you give up your right to sue the lender for return of your security deposit.
3. The price of moving. Include in this protection/pet/other deposits, the cost of movers, or the truck and pizza for your friends, utility deposits, shifting your address everywhere, the time you have to impression work to deal with finding a new home etc.
Answered by racks jackson
Mon Feb 6th 2012 at 2:21am
How about a tenant with an unauthorized dog (pit bull) that is both a liability and damaging the premises? The tenant was already told to get rid of it and hasn't. what is better, cash for keys or eviction?
Answered by cm
Fri Aug 3rd 2012 at 11:55am
Thank you for your time. I am paid up on my rent. I have no intention on not paying or staying here for long. I just want to know what my legal rights are. I am recieving section 8 that helps with my rent. I thought new owners have to give 90 days when its going through escrow? And I have only been served a thirty day notice. on the notice it says housing tenants get 90 days. They ignored that and checked off 30 day notice. If I am allowed 90 days then 1,500. is not enough. I will need to get a motel for us and storage until I find proper housing to pass section 8 inspection. Its been 10 days from notice. They can not evict me until my 90 days are up, right? And I still feel like I have not properly been served? I have no problem giving cash for keys but, I need more cash to move out in 10 days. I need help from moving co. I cant do it alone.. Thanks again. So my big question is. where do I stand legally? I have great rental reports and plan on keeping it!
Answered by chris
Thu Sep 20th 2012 at 10:58am
I am buying a foreclosed home from a bank through auction.com auction. At the close of escrow - next week - I will get a quit claim deed from the bank/seller. The property is still occupied by "someone" (presumably previous owner or a relative). What is the best action plan for me? Should I try to arrange C4K myself? Or post 3 day notice first? Or hire an attorney to handle the eviction? I have bought several REO properties before but this is the first time which will involve eviction and I am nervous (to say the least)!
Answered by Sandy
Wed Nov 7th 2012 at 5:49pm
Do you have to give your ss# and sign a W-9 if you accept Cash for Keys? Not sure if you've answered this question.
Answered by cindy
Wed Nov 14th 2012 at 12:03pm