When someone can’t make their mortgage payments and foreclosure is coming, the lender might offer something called a cash for keys deal. This is an agreement where the homeowner or tenant gets paid to leave the home. In return, they agree to move out by an agreed upon date, leave the property in good shape, and hand over the keys. This process can be faster and cheaper than going through a full formal eviction.
Cash for keys is not only used in foreclosures. It also happens in rental situations. For example, if a landlord wants to avoid the eviction notice process, they might offer tenants cash to move out peacefully.
In both situations, the goal is to make things easier and less costly for everyone involved.
In a cash for keys foreclosure situation, the homeowner might be behind on their mortgage, and the bank is preparing to take the home. Rather than go through the courts and pay legal and attorney fees, the lender can offer the homeowner money to move out.
The idea is simple: avoid damage, delays, and legal steps. If the homeowner agrees, they can avoid having an eviction notice posted, avoid being removed by law enforcement, and possibly avoid having an eviction on their record. Meanwhile, the bank saves time and money.
The amount of money offered can vary, but it’s usually based on how quickly the person agrees to leave and how well they care for the property. The quicker and cleaner the move, the more likely the payment will be higher. A typical offer might cover moving costs, utility deposits, or first month’s rent at a new place.
The next step is the keys agreement—a written contract between the homeowner or tenant and the bank or landlord. This agreement should include:
Some agreements will also include notes about not damaging the property and may require a final home inspection before the money is handed over. It’s important that both parties involved—the lender or landlord and the tenant or homeowner—sign this written agreement to avoid any misunderstandings.
A proper agreement form is essential for legal protection. It needs to clearly say who is offering the cash, what the person has to do to get it, and what the timeline is. This helps avoid confusion or broken promises. Make sure the agreement says you will not owe any more money and that you’re released from future rent or mortgage payments.
For tenants, this can also be a good time to talk about the security deposit. Ask if the deposit is part of the cash offer or if it will be returned separately.
If the agreement is unclear, talk to a housing counselor before signing. You can find help through organizations like Credit.org or a local HUD-approved counselor.
You might wonder why a lender or landlord would give you money just to leave. The answer is simple: it’s often cheaper for them.
A formal eviction can take weeks or months. During that time, the landlord or bank gets no rental income or mortgage payments. They might have to pay court costs, hire a lawyer, and possibly deal with property damage. Then they have to clean, fix up, and re-list the property.
With a cash for keys arrangement, they avoid all of that. By paying a small amount up front, they regain control of the home faster and with fewer costs.
Some landlords also use cash for keys to avoid conflict with many tenants or difficult legal processes.
In most cash for keys agreements, the property must be left in broom clean condition. This means it should be free of trash, furniture, and personal items. The walls, floors, and fixtures should be in normal condition. Appliances like stoves and refrigerators should not be missing.
It doesn’t have to be spotless like a hotel, but it should be clean enough that the new owner or landlord doesn’t have to spend a lot of money on cleaning and repairs.
During the COVID-19 pandemic, landlords across the country faced temporary bans on evictions. These bans were meant to keep people safely housed during the public health crisis. However, even when formal eviction was not allowed, landlords could still make a cash for keys offer.
As long as the landlord followed all state and local laws, it was legal to offer money to tenants in exchange for vacating a rental unit. Some cities created new rules during the pandemic to control how these offers could be made. These included requiring:
These changes were meant to protect vulnerable tenants from being pressured or tricked into leaving their homes unfairly. In many areas, laws like this still exist or have been updated to reflect the lessons learned during COVID.
If you’re offered a cash for keys agreement today, check your local rules to make sure the deal is legal. You can also talk to a HUD-approved housing counselor to understand your rights and options. Credit.org is a great place to start.
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Every cash for keys agreement should be clearly outlined in writing. A written agreement protects both sides and makes it easier to resolve any disputes.
Here are some items that should be included in the keys agreement form:
Without a written deal, it may be difficult to prove what was agreed upon or to enforce your rights if the other party doesn’t follow through.
When you receive a cash for keys offer, think about what you’ll need to move out. Will you have to pay:
Add these up to get a sense of what a fair amount would be. Then compare that to the offer on the table. If it falls short, you may want to ask for more.
Be careful, though. If you ask for too much, the landlord or lender may decide to go ahead with a formal eviction instead. It’s often best to make a reasonable request and offer something in return—like moving out sooner or helping with minor repairs.
In some cases, the lender may have a keys program already in place. These programs often have set payment ranges depending on how quickly you move and how clean the property is left.
A cash for keys foreclosure or rental deal can be the right move in certain situations. You might consider it if:
Even though it might seem strange to get paid to leave, it can make sense for both sides. It avoids court, saves money, and reduces stress.
For homeowners, a deed in lieu of foreclosure paired with a cash for keys agreement can be an effective way to walk away from a bad situation without long-term damage to your credit.
For tenants, it can help avoid legal problems or negative marks on rental history. Renters can get help through Credit.org's Rental Counseling services.
State laws play a big role in how cash for keys agreements are handled. Some states allow landlords or lenders to make offers freely. Others require that you be told about your rights or given time to consider the offer.
There are also rules about:
You should always check both state and local laws before signing anything. Rules can vary widely by city or county, so don’t assume the same rules apply everywhere.
A local housing counselor or nonprofit legal aid group can help you understand the details in your area. These resources can also help you review the written agreement before you sign
There is no fixed cash amount for a cash for keys deal, but offers often range from a few hundred to several thousand dollars. The total depends on a few things:
For example, if the property owner is facing a long, time consuming legal fight, they might offer more just to speed things up. On the other hand, if the tenant or homeowner is difficult to work with or has already damaged the property, the offer may be lower—or skipped altogether.
Here are a few example ranges:
Whatever the number, a fair amount is one that covers your basic moving costs and allows the landlord or lender to avoid bigger losses.
There are risks in any cash for keys agreement, especially if you don’t have the deal in writing. Some people might try to take advantage of the situation by making false promises or asking for extra fees.
Watch out for:
To protect yourself:
If anything seems suspicious, talk to a housing counselor. You can also file complaints with the Consumer Financial Protection Bureau or your state’s housing agency. For a list of current, active housing assistance programs and laws, visit HUD’s official site or check ConsumerFinance.gov for guidance.
Learn more: 11 Tips for Avoiding Predatory Lending
After both sides sign the written agreement, the next steps are simple:
If the other party fails to pay after you’ve met all terms, you can take legal action. That’s why it’s important to have a strong agreement in place and keep a paper trail.
If you’re unsure whether to accept a cash for keys arrangement, here are some alternatives:
But for many, cash for keys is the fastest and cleanest way to leave on good terms, especially when facing a lengthy eviction process or foreclosure.
A cash for keys foreclosure or tenant deal may seem strange at first, but it has benefits for both sides. It can help you:
Just make sure everything is clearly written down and legal in your area. Remember, the goal is to leave the home in good shape and walk away on fair terms.
If you’re in this situation, don’t go it alone. Work with a HUD-approved housing counselor to understand your rights and create a strong plan. Credit.org offers free, confidential help with budgeting, debt, and foreclosure options.
