papa, it is illegal in CA for a buyer to pay "short sale negotiation fees" The reason being is that negotiation is the agent's job. We just had two Brokers of MAJOR kw offices lose their licenses over that.
I believe this to be incorrect information. It's very possible they lost their licenses for not correctly disclosing the fees, but it's not illegal for a buyer to pay the fee. Please look up "DRE Winter 2011 bulletin" and refer to page 3. Acting California Real Estate Commissioner Barbara Bixby wrote:
A persistent question that the DRE
receives on the subject of short sales is whether
fees can be charged to a buyer in a transaction to
compensate a short sale negotiator, or to provide
additional compensation to a broker, for the work
necessary to accomplish a short sale. California
Senate Bill 458 (2011), which was signed by
Governor Brown and became effective in July
2011, prohibits short sale lenders from requiring
to pay any additional compensation
- aside from the proceeds of the sale- in exchange
for the written consent to the sale.
The Real Estate Law does not expressly prohibit the payment
of short sale negotiator fees by a buyer
as long as the
purported short sale negotiator is properly licensed under
California law, and there is an understanding by and full
written disclosure to all parties in the transaction, including the short sale and originating lenders.
To ensure that there is no confusion, mystery, or lack of
transparency with respect to such fees, the compensation
should be disclosed to all parties in writing, both in the
purchase agreements and in the escrow instructions, and the
fees must be properly documented in the appropriate line
item(s) in the HUD 1 closing statement.
So if you read what the Commissioner wrote regarding the law, it's clear that sellers cannot pay negotiator fees, but buyers can (assuming that it is properly disclosed to ALL parties in the transaction).