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Unlicensed Third-Party Short Sale Negotiators - Washington Department Of Licensing’s Official Stance

Many real estate agents in Washington State use unlicensed third-party negotiators to handle their short sales.  I have always discouraged that practice (see my March, 2009 blog post, Is Your Real Estate Agent Breaking The Law?).

Third-Party Short Sale Negotiators In WashingtonThe Washington State Department of Licensing has now taken an official stance on this.  On their website under “New Real Estate Law Frequently Asked Questions”, they state that short sale negotiators must hold active real estate licenses or be appropriately licensed by the Department of Financial Institutions, and work under the authority of their designated broker.  The department of licensing is currently investigating complaints of unlicensed short sale negotiators (see Real Estate Commission Meeting Minutes).  Real estate agents who are using unlicensed short sale negotiators can be charged with aiding or abetting unlicensed activity and are subject to disciplinary action, according to the Department of Licensing.

Unlicensed third-party short sale negotiators are responding by stating that they’re really “facilitators”, not “negotiators”.  That may technically be true, but that doesn’t mean that the state sees it that way.  I certainly wouldn’t want to be standing in front of a judge trying to explain the difference between “facilitating” and “negotiating”.  And as a real estate licensee, I wouldn’t want to risk my license being suspended while my relationship with an unlicensed short sale negotiator is being investigated.

I use an experienced short sale attorney to handle my short sales.  My attorney also happens to have a real estate license, in addition to being an escrow attorney.  He was working with short sales before most real estate agents even knew what a short sale was.  If you’re a real estate agent in the Seattle-Tacoma-Everett area reading this, I would be happy to refer you to the short sale attorney that I use, no strings attached--I can’t receive any payment for an attorney referral.  (See Short Sales For Real Estate Agents for more information.)  As real estate agents, we need to keep our business practices above-board and eliminate opportunities for any bad press relating to real estate agents.  Would you put your license at risk?
Published Thursday, February 11, 2010 1:35 PM by David Monroe

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