Know your buyer's intentions before accepting the offer......

Whether your listing is in Stockton, Sacramento, Manteca, Livermore or Los Angeles California.  Whether it is Northern California or SoCAL, the rule is the same.  And it is important that you know the buyer before you accept an offer for a short sale. 

Well.... you don't have to actually know them, but you do need to know there intentions --- if they are going to be an owner occupied buyer or if they are an investor.

Reason: In California if a seller has a Notice of Default filed on the property and meet 3 other conditions, the process changes and the rules of the sale change.  

Scenerios:  A buyer is interested in one of your listings that is a seller that has an active Notice of Default recorded (seller is in foreclosure process) -- that buyer is not going to occupy the property after sale.  They are an investor.  They do not have an agent... they ask you to represent them or they go find someone else to be their buyer's agent.  This is a violation of the rules.  The rules states that if all four of the following conditions are true -- that buyer cannot be representated by a licensed real estate agent.   That type of represenation requires that the agent is bonded and California does not have that bond.  So no do it!!! 

Here's the conditions: There are 4 points that will put you on the wrong side of the law if you represent a buyer that is an investor of a seller that has a Notice of Default recorded against that property - this is called a Home equity sale:  The conditions are

1. 1.    There is an outstanding Notice of Default recorded
2. 2.    The buyer will NOT use the property as a personal residence
3. 3.    The property is 1-4 family dwelling units
4. 4.    The owner occupies one of the units as a principle residence.

All 4 of these conditions must be met in order to trigger the home equity sales law. If this is the case, the rules and process change to:  

The buyer will need to use a different purchase agreement in California.  You will need to have the Notice of Default Purchase Agreement (NODPA) and two other forms; the Home Equity Explanation and the Agency Agreement (HEAA).

I believe it is OK to help the buyer fill out the form and you can charge a reasonable fee for doing so, but you cannot represent that buyer in the transaction.  Please check with the Department of Real Estate to verify what you can and cannot do in this type of situation.