Short Sale Negotiators must be licensed?

[Brian Wall]

I just got finished reading this article here, and the Assitant Deputy of the DRE basically says, among other things, that the person or entity that negotiates with a lender on behalf of a seller must be a licensed entity.

http://www.loansafe.org/short-sale-fraud

Can someone clear this up for me? I am looking at doing my first s/s flip, and was planning on hiring a Florida based company (someone we all know here on the boards), to negotiate with the lenders, how can I protect myself, and the listing agent?

BTW, the article talks about other issues with fraud around short sales, all of which could be diffused with proper documentation, so I am not worried about the other things, just the licensing of the negotiator piece.

PS - Just found the actual DRE document where the article came from http://www.dre.ca.gov/pdf_docs/Article_ShortSales03_2010.pdf

[Scott Hubbard]

I believe, as it was told to me by a CA attorney, this law applies to a third-party person or entity charging a fee.

If your a principal in the transaction, then you can negotiate without being in violation of the law as long they are not being compensated through a fee. Principal's in transactions are paid through proceeds of the sale (profit) as opposed to a fee. Taken from the link you provided - Additionally, if a person is acting solely on behalf of himself or herself, or itself in the case of an entity, there is no need for a real estate license since the person or entity is not acting on behalf of another or others.


My company, too, will no longer negotiate in California as a third party.