Several people have asked me about my C4K experience, so rather than post it multiple times in response to each poster, I'm creating this new thread.
My experience was in Northern CA, with a Fannie Mae backed loan through Bank of America working with Keller Williams as realtor representing lender. I was renting a home that got foreclosed on, so while my experience is from a renter's angle, a lot of the mechanics apply to homeowners. The main difference is that as renters we are in a better position to negotiate higher amounts due to passage of recent legislation, e.g. they can't kick us out of a foreclosed home for a minimum of 90 days vs. homeowners who can get as little as 3 days.
Here is one of my previous more detailed posts on the matter:
"The process of foreclosure itself shouldn't affect the cash for keys piece.
Think about it this way, when a lender obtains a home at foreclosure, they generally would want to take possession of the home and put it back on the market as soon as possible...note that I said generally, in this economy lots of things are skewed.
In order to do that, lender needs you to do one of two things: Surrender the house voluntarily and hope that you don't trash it on your way out, or force lender to spend a few extra thousand $$ and time by having to pursue an eviction action against you through a court of law, which, if you know you state's civil code, you can drag for a while (read make more expensive for lender) by filing appropriate motions, etc. This all has inherent and real costs for lender.
Now that you understand why cash for keys, let's go with mechanics of what worked for me.
1. Wait for title to transfer (perfection of foreclosure to lender). Here in CA this is done through a public auction. If there are no bidders for he property at the auction, lender takes home by default.
2. Wait for lender's representatives to contact you, or if you want o leave property quickly, you can try contacting them. You usually will know who the lender's rep is by contacting lender ansd seeing who they assigned property to. Often times, weeks, months may go by before someone at lender realizes they now own yet another property. Don't fret, they still need to initiate contact with you in order to ask you to leave. Here's where you need to start using your judgement. Obviously you are living "rent free" at this point in time, so you "should" be saving up a good chunk of change depending on how long it will take lender to initiate contact. Sometimes, you may have saved enough that you just want the insecurity of "when will they come knocking" to go away and move on your own. Sometimes, in my case for example, only two weeks went by from auction date to lender contact. I had no time to live "rent free" so cash for keys was needed.
3. You should have studied you state's civil code as it pertains to foreclosure processes and evictions. You need to know your rights, whatever they may be, and not be afraid to assert them to lender. Your rights will only protect you as far as your willingness to assert them. Please visit this website:
It was a great resource of legal information for me when I was going through my process. It also allows you to ask real questions and get answers from real attorneys for free.
4. Should you need to negotiate C4K (cash for keys), start by being NICE to lender rep, usually a realtor. The realtor will have the ultimate say in deciding to pursue some $$ for you or not. Be nice, respectful, professional.
5. Attempt to negotiate a fair amount (think security deposit plus first month's rent at new place, maybe moving costs). Be prepared to offer a surrender date that is a month or so out. At this point you should pretty much have identified a couple properties that are suitable for you and that you can pull the trigger on quickly.
Lender rep will come back with a counter offer and a set of dates. Usually the higher dollar amounts will be for the shortest surrender times, e.g. vacate in two weeks. Be prepared to do it if you want the cash. Mine was dated 4/27 and read: vacate by 5/11 = $4070, if by 5/31 = $3,000, 6/30 = $0.
Additionally, C4K is an insurance for lender that you will not trash house upon departure and will surrender it in broom clean condition. Meaning: no fixed appliances are removed, no punching holes in walls, no destroying stove, etc (you get the picture here right?), in addition to vaccuming, sweeping and dusting. Remove any and all personal property and trash/debris from property PRIOR to surrender.
Hope this helps.
My experience was in Northern CA, with a Fannie Mae backed loan through Bank of America working with Keller Williams as realtor representing lender. I was renting a home that got foreclosed on, so while my experience is from a renter's angle, a lot of the mechanics apply to homeowners. The main difference is that as renters we are in a better position to negotiate higher amounts due to passage of recent legislation, e.g. they can't kick us out of a foreclosed home for a minimum of 90 days vs. homeowners who can get as little as 3 days.
Here is one of my previous more detailed posts on the matter:
"The process of foreclosure itself shouldn't affect the cash for keys piece.
Think about it this way, when a lender obtains a home at foreclosure, they generally would want to take possession of the home and put it back on the market as soon as possible...note that I said generally, in this economy lots of things are skewed.
In order to do that, lender needs you to do one of two things: Surrender the house voluntarily and hope that you don't trash it on your way out, or force lender to spend a few extra thousand $$ and time by having to pursue an eviction action against you through a court of law, which, if you know you state's civil code, you can drag for a while (read make more expensive for lender) by filing appropriate motions, etc. This all has inherent and real costs for lender.
Now that you understand why cash for keys, let's go with mechanics of what worked for me.
1. Wait for title to transfer (perfection of foreclosure to lender). Here in CA this is done through a public auction. If there are no bidders for he property at the auction, lender takes home by default.
2. Wait for lender's representatives to contact you, or if you want o leave property quickly, you can try contacting them. You usually will know who the lender's rep is by contacting lender ansd seeing who they assigned property to. Often times, weeks, months may go by before someone at lender realizes they now own yet another property. Don't fret, they still need to initiate contact with you in order to ask you to leave. Here's where you need to start using your judgement. Obviously you are living "rent free" at this point in time, so you "should" be saving up a good chunk of change depending on how long it will take lender to initiate contact. Sometimes, you may have saved enough that you just want the insecurity of "when will they come knocking" to go away and move on your own. Sometimes, in my case for example, only two weeks went by from auction date to lender contact. I had no time to live "rent free" so cash for keys was needed.
3. You should have studied you state's civil code as it pertains to foreclosure processes and evictions. You need to know your rights, whatever they may be, and not be afraid to assert them to lender. Your rights will only protect you as far as your willingness to assert them. Please visit this website:
It was a great resource of legal information for me when I was going through my process. It also allows you to ask real questions and get answers from real attorneys for free.
4. Should you need to negotiate C4K (cash for keys), start by being NICE to lender rep, usually a realtor. The realtor will have the ultimate say in deciding to pursue some $$ for you or not. Be nice, respectful, professional.
5. Attempt to negotiate a fair amount (think security deposit plus first month's rent at new place, maybe moving costs). Be prepared to offer a surrender date that is a month or so out. At this point you should pretty much have identified a couple properties that are suitable for you and that you can pull the trigger on quickly.
Lender rep will come back with a counter offer and a set of dates. Usually the higher dollar amounts will be for the shortest surrender times, e.g. vacate in two weeks. Be prepared to do it if you want the cash. Mine was dated 4/27 and read: vacate by 5/11 = $4070, if by 5/31 = $3,000, 6/30 = $0.
Additionally, C4K is an insurance for lender that you will not trash house upon departure and will surrender it in broom clean condition. Meaning: no fixed appliances are removed, no punching holes in walls, no destroying stove, etc (you get the picture here right?), in addition to vaccuming, sweeping and dusting. Remove any and all personal property and trash/debris from property PRIOR to surrender.
Hope this helps.