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Robert Chome…, Real Estate Pro in San Diego, CA

Is it legal for a listing agent to force a buyer to use their preferred lender as a term of the purchase contract?

Asked by Robert Chomentowski, San Diego, CA Thu Sep 22, 2011

I had a Realtor do this to me recently. I had a fully pre-approved client and they offered in this listing agents short sale. The seller countered that the buyer MUST use their lender, not just cross qual, they MUST use his lender or not get the property. I even talked to the lender and explained my level of experience, etc.. and he still forced the buyer to use his lender. Is this legal? Is this fully ethical?

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Answers

62
I'm an investor who bought 30 houses last year. I've dealt with numerous transactions and encountered so many problems dealing with agents, buyers, and their loan officers. The agents who think this is illegal and unethical will be in for a big surprise when the market heats up and they have to compete against multiple other buyers in order to buy a house. As a seller, I have the right to ask my buyer to use certain escrow or loan officer as long that I do so in good faith and I don't get some sort of kickback from them. If you don't want to use my preferred lender, then don't make the offer. Go find another house for your client. I have other offers to consider.

Most agents are so inexperienced and incompetent that all they can do is complain. They don't bother to go and find great loan officers to work with. They would let their buyer, who buy maybe 1 or 2 houses their entire life, dictate which loan officer to use. These agents don't know how to qualify their buyers. They don't know how to qualify their buyer's chosen loan officer, who may be a certified idiot... These agents would submit offers out of desperation, hoping the deal would stick while possessing no knowledge or control to make the deal close...

And they would expect sellers like me to accept their client's offer. You would not believe how many times I'd been burned by these agents and buyers and their loan officers just in the past 6 months... Just last week, a loan that I thought would close ended up falling apart because the loan officer kept saying the borrowers are well qualified. Turned out he forgot to ask the borrower to file for their 2011 tax return at the beginning of the loan process. He dragged the deal on and on for 40 days. After we got sick of him, I asked the borrower to use my preffered lender. Well, borrower's mid credit score was only 620 all along... Step in my shoes and the borrower's shoes and think about that for a moment.

If you're a great agent, then stop complaining. Write a nice letter explaining your level of qualification and the qualification of your buyer and the loan officer. Explain within the letter how confident you are and the exact reasons why you are confident. Submit such letter along with your offer. And if the seller still insists your client using his preferred lender, then take some time to quickly research the preferred lender. See if there's anything weird going or perhaps the seller simply just doesn't want to let a\his deal drag on for weeks while turning away perfectly qualified buyers... Stop complaining. Educate yourself. Prepare yourself. Be the great agent that your buyer supposedly hired.
4 votes Thank Flag Link Wed Feb 6, 2013
110% violation and against the law in most states. For sure against the law in FL.
Flag Fri Jul 18, 2014
Rude. You need to lighten up a bit. Maybe go hug your dog or something. Sheesh. Find your happy thought Peter Pan.
Flag Tue Jun 10, 2014
FYI - If you are the seller and you dictate the Title company you must also pay for the Escrow and Title fees otherwise it is considered a RESPA violation and you can be sued for up to 3x the amount of the fees after close. In other words whoever pays gets to pick! In Nor Cal Escrow and Title are combined companies.
Flag Wed Jan 22, 2014
And I also do agree that their are a lot of idiot agents out there and also a lot of great ones. Due diligence has to come from both sides of the transaction.
Flag Mon Jun 17, 2013
Well actually you just put up more of a fight for using yours and in that I would assume that in your personality it is either your way or the highway. People that are fair and ethical do not have to put up a stink to get their point across. You would be surprised as to how many agents and their sellers, regardless of the explanation still do not accept it even if the lender is reputable. That all stems from an agenda already in place. And you kid yourself if you could ever get a straight answer from the sellers side. You have to truly ask yourself, if you are as smart as you say you are then wouldn't your agent do their due diligence and call the lender? As it is their job, oh that's right, this is lazy real estate days. Or at the very least ask your so called reputable lender what they think of the buyers lender. I think it to be easier to bully people as you are suggesting than to do the right thing and make people accountable and responsible.
Flag Mon Jun 17, 2013
I find it interesting along with all the other answers there is one thing everyone has missed.
1. The contract is between buyer and seller. Really is the seller asking for this and who are they in cahoots with on the lending side?
2. Is the SELLER is asking for this or is it the sellers agent trying to input items on a contract?
3. Have you called the agent broker?
Rule of thumb,.... If the deal stinks before you sign it how bad will the mess be when you step in it?

If I was representing the seller,...
I would not have agreed to continue with the deal. That listing would be cancelled.

If an agent who worked under me did this, that would be their last day.


Harold Sharpe - Broker
So Cal Homes Realty
(951) 821-8211
harold@socalhomesrealestate.com
http://www.socalhomesrealestate.com
California Department of Real Estate Broker License # 01312992
4 votes Thank Flag Link Sat Sep 24, 2011
Robert,

You asked: "Is it legal for a listing agent to force a buyer to use their preferred lender as a term of the purchase contract?"

The answer is NO and the proof is in the standard CA purchase contract, RPA-CA, Paragraph 18:
"SELECTION OF SERVICE PROVIDERS: ...Buyers and sellers may select ANY providers of their own choosing."

As a tactical move, if you believe the listing agent will make the decision based on the lender, start with that lender but change later. They should have no leg to stand on...but I am not an attorney nor do I play one on TV.

Dennis Smith, ABR, SRES, e-PRO, CDPE, Realtor® Lic #00476662
Certified Distressed Property Agent
RE/MAX By-the-Sea, Carlsbad CA
4 votes Thank Flag Link Thu Sep 22, 2011
Hi Robert,
This happened to me twice last year, and both times the buyer used the listing agent’s lender in fear of losing the deal. I don't think it is legal or ethical but unfortunately, we are seeing it happen.
3 votes Thank Flag Link Thu Sep 22, 2011
NO it is NOT LEGAL for the "LISTING AGENT to force a buyer to use THEIR LENDER", all of the training I have received tells me that an AGENT forcing a client to use any services falls under "Steering" and the practice should be avoided by AGENTS, but I'm not a lawyer. I go by the old adage that if you have to consider whether or not something is ethical, then it probably isn't.

If your question had said "Is it legal for the SELLER to force a buyer to use their preferred lender" the answer would be no. Either party can request which service providers are used as part of the negotiations.

All of that being said, if the lender had competitive rates and terms, charged no extra fees and provided comparable service to your client AND your client is agreeable, they have no other choice if they want to buy the property.

For example, if you are writing an offer on a B of A REO you will receive preferential treatment if the buyer is using B of A for their loan.

J.R. Thrasher
http://www.SanDiegoRealEstateVeterans.com
(619)929-0105
2 votes Thank Flag Link Thu Aug 15, 2013
I would call the RESPA line and ask, otherwise you need to go through the statues themselves. http://portal.hud.gov/hudportal/HUD?src=/program_offices/hou…
2 votes Thank Flag Link Fri Sep 23, 2011
It is not legal at all. They can require a buyer to get pre approved but can not mandate who will do the lending service.
2 votes Thank Flag Link Thu Sep 22, 2011
It's interesting that I came across this topic today because I am going through this nice, but won't go into details.

I've NEVER done this practice on my own because the contract and conditions of sale are between the buyer and seller. If my seller makes such a request on his/her own merit then that's different. Agents SHOULD NOT be putting in their own conditions as part of the contract and I highly doubt that an average seller would be making such a request on their own. They are doing so at the direction of their agent and that's where I personally think it muddies the water ! I've even seen agents request a higher commission in the purchase contract!!! WOW!!! Since when does a buyer request a higher commission for their agent as part of a condition of the sale??? Another topic for another day!

I think it's interesting here that many agents are screaming this practice is ILLEGAL, yet they don't reference any legal statue. However, one agent (Dennis S.) referenced paragraph 18 of the RPA, but if there is a counter issued and the seller counters out that section (just like anything else countered out), it will supersede that requirement (if agreed upon by all parties). Another agent (Anna M.) referenced RESPA 24 CFR 3500.15, but I don't believe it applies here because that section pertains to AFFILIATED Business Agreements and a seller is more than likely not going to have an affiliation with a lender unless he/she owns the mortgage company, at which point it must be disclosed. Another person, investor (rbui75) makes some great points with regards to being the SELLER making certain request with regards to conditions of sale with HIS property(ies). Another agent (Phyliss M) said she spoke to her Broker and was told it's DEFINETLY illegal, yet never mentioned any statue that the Broker may have made reference to...We all work together in an industry where I think there is a lot of uneducated agents, Brokers, Managers and alike who just say it's something is illegal or unethical because someone else told them so, and don't take the time to really research the matter or call for legal advise.

I've been in this business for over 10 years, a Manager/Broker for six of those years and I am not afraid to say, "I don't know, but I'll look into it" if I don't know something to be certain. I'm currently doing some research on this topic because it's becoming a common practice in this market and my next step is to call the C.A.R. legal hotline to get a more direct answer from an attorney. After all, we pay our C.A.R and N.A.R. dues for a reason and this is a great resource for us to use, yet most don't. They run to their Broker/Manager (or another agent) to look for an answer instead of doing their own due diligence. Not to say Broker/Manager or senior agents are not a great resource, but what if they were given wrong advise or information. AND, if you do go to these people and they give you an answer of "It's definitely illegal or unethical", ask them to reference the statue so you can read it for yourself and get more educated.

I will not say something is illegal or unethical without something to support it. AND so far, I've not seen ANYTHING outlined in RESPA, Fair Housing Act or any other resource to indicate this practice is illegal.

To my fellow agents, Broker, Managers, etc.: Let's take a more proactive and professional stand with regards to our industry standard and get more educated on the laws under which we operate. We are already looked at by many consumers as a profession that requires VERY LITTLE education, training to do what we do, yet we are in a profession with an unlimited income opportunity and are dealing with probably one of the most complex legal contracts/guidelines/statues of any state. We are not considered by most out there to be in a true professional career, however we are required to maintain a state license to practice our business, which qualifies us as a professional industry.
1 vote Thank Flag Link Wed Jun 5, 2013
Definitely not legal nor is it ethical. I'd have your broker give the listing agent's broker a call.
1 vote Thank Flag Link Wed May 1, 2013
It is not legal. The required use of any particular provider of a settlement service is specifically prohibited by RESPA 24 CFR 3500.15.
1 vote Thank Flag Link Tue Apr 30, 2013
The statue you mentioned does not apply to this scenario. This statue deals with AFFILIATED Business Arrangements and the requirement of disclosing such a referral to a consumer (buyer/seller). Most sellers are not going to have an affiliated business arrangement with a lender (unless they own a mortgage company), at which point they are required to disclose such affiliation.
Flag Wed Jun 5, 2013
Sounds like a call to CAR legal would have been helpful.
1 vote Thank Flag Link Sat Feb 16, 2013
CAR Legal states Not illegal to do this. Buyer doesn't have to buy the sellers property. Seller could also state he/she will only take a cash offer- whats the difference? As long as the seller does not have a financial interest in the lender (gets a kick back, etc) then it is legal. seller has the right to feel confident of a closing and buyer has the right to say no and move on. Keep in mind that the requirement to use sellers chosen lender must be put in the contract before signed. Seller can't surprise buyer after with this requirement.
Flag Tue Jun 4, 2013
Wells Fargo did that to one of my buyers a few years ago. It was a Wells foreclosure, and they said that my buyer HAD to get approved with them even though they were already approved with somebody else. He did, and then the Wells agent cut her costs below the other lender and got the buyer to go with her. He had a terrible experience with Wells.

I found it to be completely unethical and was not happy.

My two cents...
1 vote Thank Flag Link Sun Feb 10, 2013
This s illegal and unethical...If you have this in writing, I would send it to the agent's broker.
1 vote Thank Flag Link Thu Aug 2, 2012
Robert,

Short answer is no. No one can legally "force" anyone to do anything.

The seller may want the buyer to be crossed approved by their preferred lender, but by no means can they " force" a buyer to use their lender. Buyer has the right to work with the lender they feel will offer them the best terms, conditions and customer service.

I see the cross approval requirement a lot with REO sales and short sales.But even in these cases the request is for a cross approval, the buyer is not being forced to use the lender of the seller's choice.


Best of Success to You,
Kawain Payne, Realtor
1 vote Thank Flag Link Wed Aug 1, 2012
Was the property a government back loan? FHA VA etc.? If so, YES - RESPA Violation.
1 vote Thank Flag Link Wed Aug 1, 2012
Hi Robert,

I hope you do report this violation so hopefully the agents can stop doing this monkey business!

Good Luck,

Silva Salehi
1 vote Thank Flag Link Tue May 8, 2012
RESPA violation. Plain and simple. It IS illegal. RESPA violation. Did I say RESPA violation?
Web Reference: http://fredglick.com
1 vote Thank Flag Link Tue May 8, 2012
Yes I will take it up with the local board of Realtors. Is my best bet for a complaint the local board of Realtors? Complaint with the CA Dept of Real Estate? Where would I look up that federal statute? I think the newly formed National Consumer Financial Protection Board that regulates the National Mortgage Licensing System might be good to talk to as well.
Web Reference: http://www.socalvaloans.com
1 vote Thank Flag Link Fri Sep 23, 2011
In Oklahoma it is not to be forced to use a specific lender, however the arrangements that were offered may only be permitted with that lender. Ie. paid closing costs where the seller is able to offer that when you use a "preferred lender", we see it mostly with builders. What our team does is insist that we want the same deal no matter what lender they choose, and make it a part of the contract. Normally what I explain to the buyer is that the deal is really just added into the costs that lender will charge so in the end your paying for it anyways. So dont get caught up in the details. Choose your price, what you want regardless of what the preferred lender is offering and make that your deal.
1 vote Thank Flag Link Fri Sep 23, 2011
Hi Robert, This is Not leagal advice, but I spoke to a Broker/Lawyer today and he said absolutly not! Never can any Real Estate Agent FORCE a client to use thier "preferred" Mortgage person. AND to offer "perks" if your do use them is also against RESPA.

I mean Really? The seller countered to use a different lender???

To answer the ethical question. no, it's not ethical either. If you have the energy and time, you should pursue this.
1 vote Thank Flag Link Thu Sep 22, 2011
Hi Robert

On most REOs in this area I have noticed that the listing agent has a mortgage person in the confidential remarks in the MLS. He also states that any buyer MUST be pre-approved by that Motgage person, but doesn't have to use them. When I contacted one of these lenders she stated that she would give a break to the buyer (In closing costs) if the buyer used her services. Isn't that against RESPA?
1 vote Thank Flag Link Thu Sep 22, 2011
Hi Robert,
Not only is this illegal, it is completely unethical. Many Listing Agents will request that a buyer get pre-approved by their preferred lender (which allows them the assurance that the buyer truly can qualify for a loan), but the ethical practice is to let the buyer use whatever lender they want to use! In my listings, I do ask that the buyers get the "blessing" from our preferred lender, but do allow them to use their own lender if they've already been pre-approved. I even go so far as to connecting the two lenders so that if a buyer's credit has already been pulled and paperwork started, our lender can review with the buyer's lender what the situation is. This way, the buyer doesn't have multiple credit inquiries. This is the only fair thing to do. This can bring business to the preferred lender on the listing, but the business that the lender gets needs to be completely voluntary!
1 vote Thank Flag Link Thu Sep 22, 2011
Hello Robert~

Very unethical. I can completely understand a cross qualify to make sure the buyer is qualified and to have a back up direct Lender who can close in time should the Bank give a small window before the approval letter expires. I have actually had banks give us 2 days to close from the approval date, which is impossible when financing is involved.

Chris Gorno
1 vote Thank Flag Link Thu Sep 22, 2011
It wasn't the listing agent that was forcing the buyer. That wouldn't have been permitted. Possibly illegal and certainly unethical.

However, it is permissible for the seller to require it. It may not have been wise, but it's certainly permissible. Legal and ethical. Understand where the seller is probably coming from: There are lots of online lenders who promise all sorts of things to buyers. But when it comes time to deliver, they don't. You've probably run into them yourself. In my office, Realtors hate that sort of thing . . . when a buyer is supposedly pre-approved by some lender no one's ever heard of and who is based thousands of miles away. So we strongly encourage buyers to talk to a group of lenders (several different companies) that we deal with and know are professional and reputable. If the buyer chooses not to, that's his/her decision.

So, we can't force a buyer to use a particular lender. Nor can a listing agent. But the seller can. It's not always the wisest move. Maybe that selected lender isn't the best, or doesn't have a program that best fits the buyer. Still . . .

As a side note, the same issue comes up a lot with investors. Investors, in particular, like to be in charge of the entire process. They prefer that buyers use their lenders and their settlement companies because the investors have confidence in them. They want to be in control, not at the mercy of some "professional" they've never dealt with before.

I understand your concern and frustration. But the buyer was fully entitled to specify the lender to use.
1 vote Thank Flag Link Thu Sep 22, 2011
Don Tepper, Real Estate Pro in Fairfax, VA
MVP'08
Contact
That is not legal and would be considered an anti-trust violation. You should report that agent to the BRE; they can require you pre-qual with their preferred lender but cannot force you to only take a loan through them.
0 votes Thank Flag Link Tue Jul 8, 2014
You can require a pre-qual from the lender of choice but cannot require a buyer to use a specific lender. To verify you can call the RESPA line for specifics.
0 votes Thank Flag Link Fri Jun 27, 2014
What they are doing is very illegal. Steering your clients in any way with a lender or title.
0 votes Thank Flag Link Thu Jun 26, 2014
Funny, I recently had a listing agent try to do the same thing to my buyer...We fought it tooth and nail and used our own lender. No, it's not legal, nor ethical.
0 votes Thank Flag Link Sat May 17, 2014
Question posted Sept 2011
Financing is STILL an important part of any purchase offer. The seller can choose not to become a victim of the poor funding choices a buyer makes. There will be enduring, collateral damage suffered by the seller when the buyer is left at the alter by wells or chase.

This is a PRUDENT choice by the seller being driven my those SAME big banks.
0 votes Thank Flag Link Sat May 17, 2014
Really disappointed that so many licensed agents and brokers do not know the answer to this question. Illegal? Unfortunately no. Ethical? That's another question....

I work for the BRE as an investigator so I should know...
0 votes Thank Flag Link Fri May 16, 2014
I would contact a local real estate attorney and ask the question. I have known of bank foreclosures that ask the buyer to get pre-qualified with a particular lender, but that didn't mean they had to use that lender to purchase the home.

Tammy Hayes, Realtor
Re/Max Palm Realty
http://www.tammyhayes.remax-florida.com/
0 votes Thank Flag Link Wed Aug 14, 2013
It is not legal unless the Seller has demanded this. If the Listing Agent is the one demanding this, report them to the BRE and help keep the bad apples from spoiling it from the rest of us.
0 votes Thank Flag Link Wed Aug 14, 2013
ILLEGAL... I would call respa on the lender/ real estate agent.

Josh Marks
Jmarks@wintrustmortgage.com
Direct: 773.303.0033
0 votes Thank Flag Link Wed Aug 14, 2013
Absolutely not! Do they do it? Yes, many do. That lender may be good for them but not necessarily for you when it comes to rates and cost. As an agent, I understand the importance of a good lender and have preferred lenders of my own but in the case of a good offer with a lender I am not so sure of, a cross-qualification is all I require and that puts to bed my concerns of whether or not that buyer is qualified or not. The only variable left is whether or not that lender can preform and in this day and age, any good lender will have at least one place where clients and/or real estate professionals can write reviews about their experience.
0 votes Thank Flag Link Wed Aug 14, 2013
This exact thing just happened to me today. My borrowers told them to go pound sand.
They would not be strong armed into using the SELLER AGENT'S LENDER. That sounds
dubious in and of itself. Why not use the seller agent's appraiser as well.
0 votes Thank Flag Link Tue Aug 13, 2013
rbul75, you have NO right to tell them who to use.

Google RESPA. It is against FEDERAL LAW, plain and simple.

Get a great listing agent who knows what they are doing that can review an escrow and/or mortgage company to make sure they are OK.

Again, you can't violate FEDERAL law.

F
0 votes Thank Flag Link Wed Jun 5, 2013
Fred, Not sure about state laws in PA, but after my research today with a California attorney, there actually IS NOT any violation (RESPA or otherwise) when a seller requires the use of a preferred lender as a condition of sale. As long as the seller is not getting any type of compensation for such a request and we already know the agent can not get a kickback. IF the seller has an AFFILIATION with the mortgage company and/or lender, then there is a RESPA violation if such affiliation is not disclosed to the buyer. (RESPA 24 CFR 3500.15)
Flag Thu Jun 6, 2013
Okay, well I just got off the phone with an attorney from the legal hotline and here is what she said:

First off, I'm in California so not sure if something might be different in another state, so check with your local legal support.

First: It's NOT...I repeat NOT illegal for a seller to require a buyer to use a specific lender as a condition of the sell as long as the seller is not getting any type of compensation for such use. IF the seller has ANY affiliation (business relationship) with the mortgage company/lender, then it must be disclosed to the buyer, but they can still make such a request. This is outlined in RESPA 24 CFR 3500.15

IF the listing agent is making this request in a counter offer and it's not really coming from the seller's wishes, then the agent could have some ethical and due diligence matters to address if reported. This may be hard to prove seeing as the request is in the form of a counter, which is being generated by the seller and signed by them as well, so they SHOULD know what they are signing. It would be tricky, but if the buyer or buyer's agent suspects that the agent is behind this tactic and it's not really coming from the seller directly, then the buyer would have to address this matter with the seller personally and that probably will not be happening or at least it's not a common practice for the seller and buyer to communicate (in most situations).

So to sum up, if you receive a counter offer and the seller is requiring your buyer to use a specific lender as a condition of the sale, IT"S TOTALLY LEGAL (At least according to a California attorney) as long as the seller is not getting any type of compensation for such use. IF the listing agent has an arrangement for using that preferred lender and is getting some type of kickback latter, well that's another matter all together and falls under "kickbacks" within RESPA guidelines and may be grounds for disciplinary action against the lender and agent.

Note to all: Pick up the phone and call the FREE LEGAL HOTLINE when you are unsure about a matter such as this. It would have caused A LOT of agents within this post to not write some of the things they wrote...AGAIN, I'm speaking on behalf of California and legal advise from a California C.A.R. attorney....Other states may vary.

I hope some of these Brokers/Managers who gave their agents BAD ADVISE reads this OR at least researches it on their own.

Good luck....
0 votes Thank Flag Link Wed Jun 5, 2013
I just had the same issue come up and called CAR legal hotline before coming across these posts. As Jeff says the CAR attorney I spoke with said this was NOT ILLEGAL. I was a bit surprised as I always thought that a seller could only give an incentive to use a particular lender, not require it.
Flag Tue Nov 5, 2013
Robert, this is definitely NOT legal. I would report the agent to the San Diego Association of Realtors and the California Association of Realtors. This type of unethical and illegal practice shouldn't exist in our market.

Mr. Credit
Web Reference: http://www.MrCredit.org
0 votes Thank Flag Link Thu May 23, 2013
This just happened to us! We had put offers in on 8 houses and lost every one...once for not agreeing to use the selling agent's preferred lender. So this time we agreed to use the lender so we would get the house. The market is crazy here so we felt trapped. Needless to say the deal fell through now and they are holding are deposit money hostage! It's an absolute mess!!! I just want our deposit money back!
0 votes Thank Flag Link Thu May 23, 2013
No, it is not legal but does it happen? I'm sure that it does. As an Agent you should not show preferential treatment towards any company offering client services. Your job is to give your client several options that are available to them. Handing them 4-5 business cards for different lenders is the method I prefer for handling this situation. You can always give your recommendation but offering them several options lets the client know that you are looking after their best interest. Especially in todays market, where lenders are fighting tooth & nail for quality business, there is no way for you to know which lender is going to provide the best deal for your client. If you are really looking out for your client you will advise them to shop around & find out whats available. Our expertise is in Real Estate not Mortgage Lending. Sooner or later that particular agent is going to find themselves in a very bad situation.

Good Luck
0 votes Thank Flag Link Sat May 4, 2013
In this market we are seeing more and more of this. I would start with a FRIENDLY call to the agent and let them know that forcing services is not permitted. If they have disbelief, ask for a FRIENDLY conference call with the broker.

I have found that in several of these situations, the agent was unaware that forcing a lender was not allowed and they quickly allowed my buyers to use a lender of their choice.

David Rudd
Kindred Real Estate

david@kindredre.com

CA DRE # 01402946
0 votes Thank Flag Link Sat May 4, 2013
This really sounds fishy, you may want to contact the Realtor's Broker to ask if this is required by the bank that holds the note.
0 votes Thank Flag Link Sun Feb 10, 2013
This is at the very least an ethical issue. However sometimes in the case of short sales and REO's the lender may ask for a pre-approval from their institution but are usually clear that the buyer doesn't have to use them--they just want to know that the buyer is qualified. Can't believe they can force a buyer to use a particular lender--and I'm unclear if in this case the "seller" is the lender or the legal owner of the property.
0 votes Thank Flag Link Sun Feb 10, 2013
I believe it is an ethics issue, but regardless I have overlooked the listing agent's "requirements" when I see this and go forward with my buyer's chosen lender. Cross qualification doesn't bother us, but strong arm tactics do!
0 votes Thank Flag Link Sun Feb 10, 2013
Hi Phyllis,

Somehow my last response didn't post. Key difference in your case the seller is just asking for a cross-qual, but buyer can ultimately use whatever lender they want, that is fine. In my case the listing agent wrote into the offer that the buyer MUST use their lender or will not get the property period, they have no choice. Big difference.
Web Reference: http://www.socalvaloans.com
0 votes Thank Flag Link Mon Sep 26, 2011
Here's a shocker, I just found an REO in San Mateo County and in the confidential remarks, the agent states:
All Buyer MUST be preaproved by (specific lender) and that pre-approval MUST be submited with all offers, no exceptions..... what is going on? Listing agent, is not returning calls.
0 votes Thank Flag Link Mon Sep 26, 2011
Hi Harold,

That is good advice. I have not called this guys broker/owner yet. The listing agent is a broker associate, but not the broker/owner of the branch he works with I don't think. I will do that.
Web Reference: http://www.socalvaloans.com
0 votes Thank Flag Link Mon Sep 26, 2011
No, and it is a violation of MLS rules. You need to report that immediatly to the local board you are a member of.
0 votes Thank Flag Link Mon Sep 26, 2011
This is not legal advise, but I beieve it to be illegal and certainly unethical.
Web Reference: http://www.SoldByBud.com
0 votes Thank Flag Link Fri Sep 23, 2011
Funny that you ask. I had never heard of this before and actually believe that in 2010 there was some sort of ruling with respect to REOs forcing title and escrow on buyers in order to save money. On Wednesday, I conducted a short sale workshop where one of the attendees told me that the bank he was working with was forcing the buyer to use their lender, their title and their escrow. It was a lesser known bank, but I cannot remember which bank it was at this time.
0 votes Thank Flag Link Fri Sep 23, 2011
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