Many Real Estate Agents in the Arizona market are confused regarding the laws and the professional liabilities associated with short sales. Are you a Real Estate Agent wondering about the laws in Arizona regarding short sales? Are you worried about your legal risks and liability?
You are not alone.
One of the more common questions regarding Real Estate Agents and short sales is:
Is a real estate broker/salesperson acting outside the scope of their real estate license by assisting a seller in negotiations with the lender to facilitate a short sale?
And the answer is: No.
The scope of a real estate license encompasses assisting in the “negotiation of any transaction calculated or intended to result in the sale . . . of real estate.” A.R.S. § 32-2101(48)(j).
But this is where it pays to be more informed about the law.
The follow-up question that many Real Estate Agents need to ask is:
May a real estate broker/salesperson without a loan originator license be compensated as a third-party short sale negotiator in a transaction?
And the answer is: No.
A real estate licensee may not receive compensation for negotiating a short sale, unless the real estate licensee is also licensed as a loan originator by the DFI.
Given the this answer, it would seem clear that AZ DRE has answered the previous question with clarity. Namely, a real estate broker/sales person who is negotiating a short sale as a third party (and not as a customer service) would in fact have to be licensed under AZ Department of Financial Institutions.
In addition, DRE has answered the following question:
Must a third-party short sale negotiator be licensed in Arizona to negotiate a short sale for compensation on behalf of an Arizona seller?
Yes. A loan originator license issued by the DFI is required to be compensated as a short sale negotiator.
We’re Here To Help
Being a Real Estate Agent has never been tougher – and when you combine the market forces with the regulatory environment, it is more important than ever before that you have the right legal partner standing behind you.
We are not here to tell Real Estate Agents not to negotiate short sales. We are not here to tell them a law firm needs to do that. We are here to be your partner and become part of your team. If you have a client who is underwater in their home we would love to talk to them. Discuss all of their legal options and as most homeowners learn, short sale is a great solution.
Find out more about working with Arboleda Brechner by completing your information below and one of our legal experts will be in touch with you.
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