It seems that I every week I receive a call from a distressed homeowner asking whether they should do a loan modification or just get cash for keys. My response as always is, can you afford to make payments? If you can, go for a loan modification. Don’t have the money to hire someone? Do it yourself?
It is not that difficult, loan modifications are not complicated they are tedious and you are working many times with people that are extremely overloaded ergo be prepared to enter the world of duplication and bureaucracy.
Regarding cash for keys, I would only consider it if you are not behind on your payment s and still have some credit. Odds are that you are behind and that being the case a short sale may be the best financial option. Why? It will buy you time; most short sales take a long time 3, 4, 6 months or more. I have worked on a few as the listing broker for over a year. It’s just the process that is insane. The bottom line is that while you are doing the short sale you are living in the property for free.
So what is the first step? Analyze your situation and be as objective as possible, make a decision and move forward. If a short sale finds yourself an experienced real estate agent that has done “short sales” in the past, he will be paid by your lender so it doesn’t make any sense to do it yourself.
You will be surprised how many agents haven’t done one so don’t be shy and ask. The reason why this is so important to ask is that “short sale’ like loan modifications take s a very persistence, very patient person. It is not unusual to have 4 to five alive and kicking buyers through this process, as you lose one, one is replaced. This means the same paperwork has to be submitted for all, every time you submit a new buyer it’s back to the beginning.