Relocation Incentives in Short Sales: What Homeowners Need to Know
Explore how relocation incentives in short sales can help homeowners cover moving costs. Understand what they are, why lenders offer them, and how to qualify.
When you’re facing a short sale, one of the most common questions is: “Do I get anything at closing, or am I just walking away empty-handed?”
The good news: many lenders offer relocation incentives to homeowners who complete a short sale. These payments—sometimes called relocation assistance or move-out incentives—are designed to help cover your moving expenses and ease the transition into your next home. They’re not available in every case, but when they are, they can be a big relief.
What Are Relocation Incentives?
A relocation incentive is a cash payment made directly to the homeowner at closing of a short sale. Unlike foreclosure cash-for-keys, this is not about the bank paying you to vacate quickly. Instead, it’s a recognition that moving costs money—truck rentals, security deposits, utility deposits, packing supplies—and lenders want the short sale to succeed.
Amounts vary widely:
- $1,000–$3,000 is common for many national lenders.
- Certain government programs, like HAFA (back when it was active), offered up to $10,000.
- In some investor-specific cases, we’ve seen lenders approve custom incentives tied to settlement negotiations.
Why Do Lenders Offer It?
Lenders benefit when short sales close smoothly. Every failed short sale can cost them tens of thousands in delays, property deterioration, or foreclosure proceedings. By offering relocation money, they encourage homeowners to:
- Stay engaged and cooperative during the process.
- Maintain the property until closing.
- Move out in an orderly fashion, avoiding last-minute complications.
How Do You Qualify?
Qualification depends on the lender, investor guidelines, and sometimes the type of hardship. In general:
- The property must be your primary residence (though some exceptions exist).
- You need to complete all required short sale documentation.
- The sale must close successfully—if the deal falls through, no funds are paid.
Your negotiator (that’s where Crisp Short Sales comes in) will typically request relocation assistance during the approval process and confirm it in writing in the lender’s approval letter.
When Is It Paid?
Relocation incentives are always paid at closing, directly on the settlement statement (HUD/CD). They never come upfront, and they’re not contingent on what the buyer offers—it’s strictly a lender-approved benefit.
What Can You Use It For?
There are no strings attached. Once you receive your relocation incentive, you can use it however you need. Most families put it toward:
- Security deposits and first month’s rent for a new place.
- Moving truck rentals or professional movers.
- Utility deposits and setup fees.
- Furniture or household items for the new home.
Common Myths About Relocation Incentives
Myth 1: Every short sale includes relocation assistance. False. Many do, but it depends entirely on lender guidelines and investor approval.
Myth 2: The buyer pays the incentive. Wrong again. Relocation assistance is paid by the lender, not out of the buyer’s pocket.
Myth 3: It reduces the chance of approval. Not true. In most cases, relocation assistance is already baked into the lender’s loss-mitigation calculations.
Real-World Example
One of our clients in Georgia was approvehort saled for a s with Bank of America. Not only did the lender waive the entire deficiency, but they also issued a $3,000 relocation incentive. That check was delivered at closing and covered the client’s moving truck, deposits, and gave them a small cushion to get resettled.
Final Thoughts
If you’re considering a short sale, don’t overlook relocation incentives. They’re not guaranteed, but with the right negotiation strategy, they can be a helpful lifeline. At Crisp Short Sales, we handle the back-and-forth with lenders to maximize your approval terms—including pushing for relocation assistance when it’s available.
Short sales are stressful enough. Knowing you might walk away with cash to fund your move makes the process a lot more manageable.
Ready to explore your options? Start a Short Sale or learn How We Help today.