I am attempting my first short sale, located in Boulder County, Colorado. I have all the necessary docs signed by the current owners and am about to start negotiations with the bank. I really want to focus on the benefits to the bank of getting this property off of the bank’s books by avoiding the foreclosure process–could anyone help me ball park some of the costs that the bank will incur as a result of going through this process?
The costs to foreclose are not all that much, just attorney fees of less than a grand. The costs associated with holding vacant property and then reselling it is where the costs mount up. The biggest being a sales commission and title policy. There is also interest lost and the real estate taxes and the possibility of vandalism. Also if the property is in bad condition they may have to fix it up to sell as it is harder to get top dollar for property in poor condition. The bank will usually order an appraisal but that will be a cost associated with a short sale too.