Paying the short sale negotiator at closing on a short sale can be done via a Seller credit. The Seller provides a credit to the Buyer on the contract. There is an addendum to the contract transferring the Sellers credit from the Buyer to the short sale negotiator and is shown on the HUD. This mechanism has been allowed relative to RESPA on conventional loans in my experience. The Buyer usually understands as long as it has been explained in advance. There is some debate as to whether Fannie & Freddie will continue to allow this practice but I have not seen it prohibited to this point at closings. It is an artful way of conveying payment for services to the short sale negotiator on the closing statement. Third party fees such as payment for an insurance policy are often shown on the closing statement for example. In that context this practice would appear to be completely within RESPA guidelines. This technique helps everyone close a short sale more efficiently which is what the housing market needs most at this time.
I hope this post has been helpful and encouraging to those that may have thought a Renovation project was too complex or beyond their ability to manage. My intent is always to inform, educate, and generate discussion. Please call me or email me directly or visit my website for more information on renovation loans. I welcome your comments and questions!