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We put an all cash offer on a short sale in Las Vegas ($300k) 3 1/2 months ago and just got the close of escrow date. Now the seller says they can't afford to move. The bank won't give them any money. My agent is of no help. I searched the internet and find that this is not an unusual situation. It seems it is common practice to offer the seller "key money". That is money to help them move and leave the house in good shape. What do you all think of this? And if it is a good idea, how much money?
Under HAFA, they would have got about $3,000, but I guess they didn't go that route.
If you REALLY want the house, offer them some money.
Start off with $1,500 or first try their bank to give them money so the deal wont get spoiled.
We put an all cash offer on a short sale in Las Vegas ($300k) 3 1/2 months ago and just got the close of escrow date. Now the seller says they can't afford to move. The bank won't give them any money. My agent is of no help. I searched the internet and find that this is not an unusual situation. It seems it is common practice to offer the seller "key money". That is money to help them move and leave the house in good shape. What do you all think of this? And if it is a good idea, how much money?
Thanks,
Mary H.
It isn't common practice in my area. Do you have a buyer agent or did you make the offer through the listing agent?
I do have a buyer agent, but he is not experienced in short sales. I really want this deal to go through. If it just takes $2-3k, I'll go for it. I just wondered if there was a downside to this key money thing.
It's hard to tell, but sounds like the sellers are just using the short sale to extend the time they can stay in the house before foreclosure. If it was me, I would not sign any closing docs until they are gone. Clean house - not likely to happen but you don't want to have to evict.
I'm not sure what you expect your agent to do other than work with the sellers agent to figure out how to get them out of the property. They have no authority over the situation.
And if you do end up offering "cash for keys" like the bank calls it, draw up a contract, have the sellers sign it, and don't give them the money until their stuff is out and the house is clean.
Thanks for the advice. I guess I expected my agent to explain all this to me instead of my having to look it up on the internet. I'll run this by him and see what happens.
I've never heard of the practice, at least not coming from the buyer. In fact, generally the buyer, seller, and both agents have to sign an affadavit that there's no hidden money involved to their knowledge and that's what this sounds like. They signed a contract and it doesn't matter whether it is a short sale or not. In my book, they are shaking you down and trying to extort money.
I have never heard of a key money agreement. If you are buying a short sale and agree on a close date. Once you close the property is your's. Once you agree on a short sale. Isn't it the bank that controlls the close date and force the seller to move out before that date? I would buy the property get the cops to evict them from your property. Or just go in and change the locks you own it after you close. Unless you agree on a rent option or other situation.
^^^^Eviction is harder and more expensive than you might think. The bank will not force the seller to move. That's why I personally wouldn't buy a short sale that isn't vacant at the closing. Or at least I would require a holdover contract and a large deposit to be paid to escrow before I signed documents. Just my opinion.
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