How do I break the foreclosure news?

Question

We are closing on a neighboring foreclosed property tomorrow that's occupied by the (former) owner, and part of our contract with the bank stipulated that we couldn't talk to the current owners about the foreclosure or let them know we were under contract to purchase the property. I know this may end up in court, but we're planning to approach them tomorrow and let them know that we now have the deed to the house and would like to make a cash-for-keys offer if they can agree to be out in 30 days. We don't know these people well, but we've had a few conversations with them since we moved to the neighborhood two years ago and they seem okay, but it really feels like their reaction to the news that the property has officially sold and we want to take possession ASAP could go any way. We thought they had moved out, but another neighbor told us today that they didn't think that was the case. I'm looking for advice on what all I should emphasize/avoid saying. What would be a good cash-for-keys offer to get this conversation started?

Scott Mac · Answer

Hi Erica,

Knock on the door and ask them what they intend to do about it, and negotiate from there if needed.

Be wary of physically intimidating angry drunks.

Good Luck!

David Ament · Answer

My guess is they probably know this day is coming. I would just see how they take it and reserve the cash for keys, only if necessary.

Erica L. · Answer

We’re still in the thick of it. I talked to the former owner, offered them cash and a 30-day move out. They said they don’t think it’s possible for them to be out in 30 but they’ll do their best. Cash leaves the table after 30 days. Housing here is super tight, and they have a ton of stuff on the property. We’ve started the Writ of Possession process in case we end up having to go that route, but I’m still hoping we can work something out. So long as we’re seeing progress (they stay in touch with us and items are leaving the property), we’re willing to be flexible within reason. I’ll definitely post an update when it’s all said and done.

JD Martin · Answer

Because these are neighbors, it might be wise to have the property owners listed as an LLC or similar and just go through a notification and eviction process so they don't know it's you. These types of things can get nasty.

JD Martin · Answer

Well, sometimes C4K works a lot faster than an eviction. Depends on the state and locale and if they try to fight it. I'm not a fan of C4K at all but I also live in a fast eviction state.

Marty Boardman · Answer

Since you purchased the house from the bank the foreclosure has already taken place, so it shouldn't be much of a surprise to the former owner that they need to get out. That said, it's difficult to know the whole story.

About two months ago I purchased a house at a sheriff's sale. The owner was still living there and I made several attempts at a cash-for-keys offer after the auction but no one would answer (or call me back from the note I left on the door). I initiated eviction proceedings and finally last week the sheriff went to the property and told the owners they had to get out.

There was a full-scale family feud on the driveway. Apparently the husband told his bedridden wife and adult children he had it all worked out with the bank and the notices they'd been receiving were a mistake. It was awful. The guy's daughters were yelling, screaming, crying and slapping him in the face.

I suggest you make an attempt to speak to them about cash-for-keys, but also initiate eviction proceedings. That may be the only way to get them out. Good luck Erica!

Marty Boardman · Answer

Erica, how did this turn out for you?

Marty Boardman · Answer

You offer the former homeowner cash to move out (peacefully) in lieu of an eviction. It can work if the former homeowner understands what has happened and isn't in complete denial.

Erica L. · Answer

Thanks for this, JD. It’s in an LLC, and I thought long and hard about staying anonymous during this process, but this is a small town, and the secret will get out the day we get the keys. I also hope (maybe naively) that having them know I’m someone in the community might make them a little less hostile. Like, it’s no longer the big bad bank taking advantage of the little guy, which is how I’m sure they’ve perceived the foreclosure process. I’m just a neighbor who needs a house for their ailing mother and happened to win a cheap foreclosure auction without fully realizing the home was still occupied full time, which is essentially what I ended up saying when I let him know I now hold the title and need him out in 30 days.

How do I break the foreclosure news?

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