REO/Bank-Owned
Cash for Keys

Cash for Keys

A “cash for keys” offer is a deal which a bank may make with a homeowner, in which the homeowner is given a cash settlement in exchange for vacating his or her foreclosed home. Cash for keys offers are also made to renters. The advantage of cash for keys from the point of view of the bank is that it gets people out of the house quickly, and the house is often left in better condition than it would be in the event that an eviction was needed. However, it is important for people to be aware that a cash for keys offer is a last resort, because once the paperwork is signed, you typically have no recourse.

In a classic example of a cash for keys offer, the bank will initiate the foreclosure process on a home, and indicate that it is willing to pay the homeowner a set amount of cash in exchange for the keys. The cash may be based on a percentage of the appraised value of the home, or it may simply be a static payment. If the homeowner accepts, ownership of the home reverts to the bank, and a moving date is set. The time to negotiate is when the offer is made; if you feel that the offer is unfair, say so, and you may be able to get a better deal, since the bank just wants you out of the home.

In addition to helping banks cover their losses quickly, cash for keys can also prevent damage to the house. In some cases, people who are evicted feel resentful and angry, and they may stop maintaining the house or actively damage it out of spite. As a result, a bank might need to invest in some basic repairs to make a house salable before putting it on the market, and this eats up more time and money.
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