REO Disposition Calculator

REO disposition includes carrying cost, broker fees, repair, and final sale net of UPB.

Sale price

UPB at foreclosure

Months carried

Monthly carry cost

Repairs

Broker commission %

Closing costs

Net recovery

$251,100

Total costs

$48,900

Recovery % of UPB

0.7%

How the math works

Costs = carry + repairs + commission + closing. Net = sale − costs. % UPB = net / UPB.

$300k − ($14.4k + $12k + $18k + $4.5k) = $300k − $48.9k = $251.1k = 71.7% of $350k UPB.

How to Use

Enter sale price.
Enter upb at foreclosure.
Enter months carried.
Enter monthly carry cost.
Enter repairs.
Enter broker commission %.
Enter closing costs.
Read net recovery.

Frequently Asked Questions

REO disposition costs?

Carrying cost: 1.5–4% of property value/yr (taxes, insurance, HOA, maintenance, utilities). Time on market: 90–180 days typical post-completion. Broker commission: 5–7%. Repair to MLS-ready: $5–50k typical, sometimes much more. BPO/appraisal: $400–1,000. Title curative: $500–5,000. Property preservation (winterize, secure, etc.): $1,000–5,000 lender fees. Net to lender: 50–80% of UPB typical for distressed REO. Investor buyers: 60–75% offer ratios.

How does this debt analysis fit a workout strategy?

Workout, default, and recapitalization decisions depend on the gap between in-place debt and current asset value. Lenders evaluate cure cost, foreclosure timeline + cost, broker price opinion (BPO), and borrower equity. Borrowers evaluate equity in the property, refinance feasibility, and forbearance economics. This calculator provides one input to that multi-factor decision.

Discounted payoff (DPO) vs forbearance vs deed in lieu?

DPO: lender accepts less than full balance to avoid foreclosure cost, common with non-recourse and underwater assets. Forbearance: payment deferral 6–18 months, balance accrues, useful when value will recover. Deed in lieu: borrower transfers title to lender, faster than foreclosure but lender takes full risk. DPO often best when borrower has new capital + lender wants quick exit.

Special servicing dynamics?

CMBS loans transfer to special servicer at default or maturity default. Special servicer compensation aligns with workout, but timeline is 6–24 months and fees stack ($25–250k+ in costs). Whole-loan and balance-sheet lenders move faster but with less flexibility. Bridge and debt fund lenders most flexible. Time-to-resolution and total friction cost should be weighted in any borrower scenario.