The simple and plain answer to this is that a short sale shouldn’t cost you anything. If it does, then it should be very little. In most cases, there are no costs or fees required for a short sale. Most of the costs associated with the procedure of a short sale include the Realtors, title costs, transfer taxes, and attorney fees. Your lender should understand that you can't afford to pay for these costs.
That is why most lenders will pay any costs involved in the sale on your behalf. You might be wondering why your lender would be willing to pay all the expenses. Here is why. If the reason for your short sale is that you can no longer afford the mortgage payments, then this means that your lender is already preparing to start foreclosure proceedings. They know that they will have to sell your home after a potential foreclosure. Because of this, lenders encourage short sales. They want to avoid a foreclosure if possible.
A foreclosure is very expensive for the lender. They have to pay all the foreclosure costs, including legal fees, taxes, insurance payments , court costs, etc. They have to pay to maintain a vacant foreclosed home, pay a Realtor to sell the house, and then sell it for below market value. They view a short sale as a less expensive alternative. This is why they are willing to pay all of the costs associated with a short sale.