What To Expect After Foreclosure
Many clients are making the decision to allow their house to get sold at a foreclosure auction, but want information about what to expect after the foreclosure sale. The following subjects are the most common areas of client concern on what a homeowner can expect to experience after a foreclosure.
Moving Out of the Property
There are only two outcomes of a foreclosure auction: 1) A third party purchases the house at auction; or 2) No one buys the house at auction and it goes back to the bank. In either scenario, the new owner will likely serve the occupant with a -3- Day Notice to Pay or Quit. Non-owner tenants are entitled to 90-Day Notices. Failure to move out by the end of the notice period will result in the new owner filing an eviction against you, which can be very detrimental to your credit. It is possible that the new owner will agree to rent the home back to the original occupant, but this is a less common scenario. Any notice will include the contact information for the new owner, so you can call and negotiate move out dates.
Cash for Keys
It is becoming increasingly more common for banks and purchasers at foreclosure auctions to offer “cash for keys” to the former occupant of the home to give them financial assistance for the move-out. Cash for keys generally involves the new owner making some payment to the former occupant in exchange for them moving out of the property on time and leaving the home in good condition. Common range of cash for keys payments are between $2,000 and $5,000. The amount of cash for keys can be negotiated. Normally, the more time you request to remain in the property, the lower cash you can expect.
Qualifying For A Rental Property
Having a foreclosure on your credit is not as big of a deterrent to future landlords as it once was because shorts sales and foreclosures are becoming very common. Although many big apartment complexes will only accept tenants with excellent credit, But many landlords are ready to accept the tenants for a credit score that is as low as 580. But if the landlords decide to look further than the credit score, then they may refuse private landlords are still offering rental houses at affordable rent rates to people who have foreclosure on their credit. After foreclosure, you can expect to have to explain the reason for the foreclosure and provide proof on consistent income to a prospective landlord. You may also be required to put down a bigger security deposit than someone that does not have credit issues. However, there is a large vacancy rate in the California rental Markey and, even after foreclosure and bankruptcy, clients have not had difficulty qualifying for a rental unit.