Well, this is why I like to visit California and not live there. One day you guys are going to legislate yourselves out of existance.

Paul - True that!

After surfing the web and reading the reactions of many Realtors towards the provisions of the Home Equity Sales Act and how it relates to their profession, I believe that many Realtors have failed to realize that this law actually works on their favor and relieves them out of potential liabilities, especially when it comes to short sales.  But before I go on I want to make it clear that I am not an attorney, nor I am giving legal advice.  I am just putting my two cents into the topic, in order words, sharing my opinion. 

I believe that when agents list a property under a short sale they can still work with an investor as long as two things are made clear in writing.  First that the listing agent is only that: the listing agent.  Second is that the investor will participate in this transaction without the representation of a buyer’s agent. 

On the flip side, I believe that this actually works for the benefit of the real estate agent, because since there cannot be another agent involved, the sales commission will not have to be shared with another agent.  Most real estate agents are aware that when it comes to short sales, since the lender is the one paying the sale commission; said lender might decide to cut down the commission.  I know this is the policy for lenders such as Ocwen.  Their short sale package reads, “Ocwen's guidelines limit costs to a maximum of 6%. (Real estate commission not to exceed 4% of sales price and closing costs not to exceed 2% of sales price.)”  Knowing what we know about the low closing ratio for short sales due in part to the hesitation from buyer’s agents to be involved in short sales, having investors buy these properties and only having another agent involved in the transaction what would a typical agent prefer, to get paid half of 6 or 5% out of nothing if the property is foreclosed because they could not find a buyer within the time frame allowed or the full 4% out something because an investor was involved? 

Furthermore I have to give credit the California Association of Realtors because by preparing the following forms they are actually making sure their members are in the position of working with investors on their short sales while at the same time they are protected from the danger of violating the Home Equity Act provisions.  C.A.R. Form BNA, Buyer Non-Agency Agreement is an excellent document that make it clear that the investor (buyer) is not being represented by the listing agent.  On top of that the California Association of Realtors has also prepared another document that further helps their members work on these types of deals, C.A.R. Form HEAA and NODPA, Home Equity Explanation of Agency Agreement and to add more protection to its members the association has also prepared another document, C.A.R. Form TBA, Termination of Buyer Agency. 

Any thoughts?

Thank you , Rosemary.  This is exactly the type of post I welcome to the group (ForeclosureFocusUSA),  It is informational primarily to the professional community.  It isn't a solicitation, and doesn't hype your service. Since inception, your posts have enhanced the level of understanding, and hence, this group. Thanks again.