The State of California requires that any person such as a consultant must have a real estate license to negotiate a short sale.  Some real estate agents who list short sales will hire the services of a consultant or firm to negotiate the short sale. The question to ask your listing agent, who will be negotiating my short sale and are they licensed.

The tasks performed by the short sale consultant/negotiator assists a homeowner or the listing agent to prepare the short sale package to be submitted to the lender and then proceeds to negotiate with the lender once an offer is received.

What if the short sale consultant requests an upfront fee to handle the negotiations?

This is not allowed. Advance fees cannot be charged for services not performed. According to the  Cal.Bus. & Prof. Code 10026, 10085.5, 2994.7, & 10085.6:

“The services to be performed cannot be separated or divided into components for the purpose of avoiding the law.  A licensee cannot write a limited-service contract for any type of loan negotiation or sale of notes.   A real estate broker cannot get paid in advance to solicit lenders on behalf of borrowers in connection with loans secured by residential one-to-four unit real property until the borrower becomes obligated to complete the loan. Advance fees are prohibited for loan modifications and for foreclosure related consulting services.”

If you are listing your home as a short sale, ask your agent who will be doing the negotiations. If not the listing agent make sure the person negotiating on your behalf has a California real estate license. To check someone’s license status with the DRE, go to its Web site at


About Linda Urbick Linda

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