Short sales have become a well known item and sales process now in the real estate world. It used to be that very few agents knew much about them, and even fewer had to work with them regularly. Not so in today’s market environment. WA State’s Dept. of Licensing, Dept. of Financial Institutions, and the Attorney General have been watching closely what has been occurring and have instituted some new rules around who can actually work on these types of sales, as has the Federal Trade Commission.
I will say that for a while, it was like the “Wild West” of real estate when all manner of people started claiming they could help distressed homeowners – and many had only the idea of ill-gotten gains on their minds. Not all were scammers, but the issues around the mortgage crisis certainly opened up the field to a lot of potential mis-information and misleading tactics.
Below is a snippet of what’s changing:
New short sale laws were adopted by the Federal Trade Commission on November 19, 2010. Washington State’s Departments of Financial Institutions and Licensing have created reference guides for Licensees & for Consumers.
There are significant changes to the law, familiarize yourself with the new requirements to ensure compliance. A few critical changes are:
- Short Sale Negotiators may not collect an upfront fee.
- A broker cannot provide short sale assistance unless they are the listing (or co-listing) broker or selling broker.
- Short sale brokers may not charge fees in excess of normal & customary commissions.
- Beware the “flip”.
Other changes are that only licensed individuals in the fields of real estate, mortgage and law (attorneys).
