Home Buying in Philadelphia>Question Details

Firsttimebuy…, Home Buyer in Philadelphia, PA

After entering into contract with a seller, the seller's agent is trying to prevent me from using my lender of choice...is this fair practice?

Asked by Firsttimebuyer, Philadelphia, PA Mon Feb 7, 2011

Per the contract we had a set settlement date and type of loan (Conventional, FHA, VA...). After contacting my bank I found out that the settlement date they could gaurantee was after the initial settlement date and that the type of loan that would be best for me would be different. The seller stated that they would be fine with changing both aspects of the contract. Once they heard the name of my lender, however, they seller's agent basically advised the seller not to make any amendments to the contract stating that if I used my bank, they would not revise the contract. If I use my bank of choise and the settlement date is delayed by a few days, the seller will most likely refuse to sign the final papers and take my deposit money. Is what the seller's agent doing fair practice? Do I have any rights in this matter?

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Somewhere on Trulia, I'm sure there is a seller who has posted a question called:

After entering into a contract with a buyer, they're trying to change the closing date, 'cause their lender can't do it in time, and they're refusing to use MY lender, who says they CAN close in time. Is this fair practice?
2 votes Thank Flag Link Mon Feb 7, 2011
Alan May, Real Estate Pro in Evanston, IL
MVP'08
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not that this is the main question. But who is the lender and what is the agent's issue with the lender? How far out is the settlement date. If she / he has had constant bad experiences with getting a loan to the closing table with your lender they may be trying to protect their own client. This of course is different from what is legal or morally correct. Call me and io can walk you through. As an independent 3rd party I can offer you some perspective - possibly--610-291-1460 -- Maura
2 votes Thank Flag Link Mon Feb 7, 2011
This is not a question for a Real Estate advice Forum. You definitely need the advice of a Real Estate Attorney. Something fishy is going on here, and it does not sound like fair practice to me.
2 votes Thank Flag Link Mon Feb 7, 2011
Hello First time homebuyer,

I am a local mortgage broker and sellers Realtors often contact me to see who iam and what lender I am using and how quickly I can get the deal done. Often times they ask information (which they have nor right to ask ( credit score is one). Without revealing my clients pertinent information I can usually reassure a Real Estate Professional that I know what I am doing and that my expectations are realistic. Often timesin short sale situations I have been asked to adhere to strict time frames when I know that the seller will not be ready when the loan is ready to go. Sellers right now are frightened that the deal falls through. You agreed to a contract and now you want to change it and you have a problem that the seller wants to protect their interests. I am guessing that you may have switched to a 203k loan and the Bank you are using is a well knowninstitution who's turn times are known in the industry to be currently running at 90 days. Or that you are using an out of state lender that nobody is familiar with. Give the seller a reason to have confidence in your choice and I am sure that they will agrre to extend the contract. Give me a call and I will be happy to explain in more detail how to resolve the situation.

Best Regards,
Alan Openshaw
Cornerstone Lending Inc
720 Second St Pike Suite 104
Southampton Pa 18966
Office 215 953 0800
Fax 215 953 1706
Cell 267 992 7276
Voted Best of Bucks 2010
1 vote Thank Flag Link Mon Feb 7, 2011
Great point. There are always 2 sides to a story --If we try to look from the opposite perspective sometimes we find great clarity!!! Superb points Alan & Mack.

1st time homebuyer ---Potentially using a different lender who can close in time is the best idea --Not the Listing agents but somweone else.
1 vote Thank Flag Link Mon Feb 7, 2011
First time Buyer:
let me caveat my answer with the proper disclosure we are all so worried about..."I am not an attorney and any information here in is not legal advice, please seek attorneys advice for legal questions." OK, we got that out of the way, contracts have "rights" for buyers and sellers and generally have clauses to stipulate financing contingencies. You need to read the paragraph in your purchase and sale contract with regards to financing, to see if you can "change lenders, back out, ect," with or without earnest money loss. I hope that helps answer your question as to "your rights in this matter." Now in terms of Sellers agent doing something that is fair/ethical.ect? I tend to agree with one writers point that the seller's agent might be protecting the seller. Not to put down the Mortgage industry in my area, however,when a buyer tells me they are working with a mortgage broker from Miami area, red flags start going up every time. This may be the case with your particular lender. Sadly, we are in an industry that does not always keep the moral and ethical standard very high. Also, is the agent asking you to use "their mortgage representative?" If not, then maybe there is something odd going on with your chosen company. Hopefully that helps.
FYI, here's a blog i did on budgeting for home expenses.
http://2000shortsales.blogspot.com/2011/01/living-within-you…
1 vote Thank Flag Link Mon Feb 7, 2011
You have the right to use whoever you wish regarding your financing. The Listing Agent may want you to get pre-approved with his/her preferred lender, however you should not have to use this lender.

I would speak with your attorney or your Buyers Agent for additional consulation.

Best of luck,

David Jaffe-SRES, CDPE
Realtor-Coldwell Banker
1 vote Thank Flag Link Mon Feb 7, 2011
Definitely seek the advice of an attorney.

One of Brown McKinney's team members is a lawyer by trade and can provide you with a consultation if you need it. Please let me know and I'll pass along his contact info.

Best of luck!

Tim

Timothy M. Garrity | Brown McKinney Real Estate, Co.
Real Estate Professional & Consultant
http://www.phillyurbanliving.com

tgarrity@brownmckinney.com Email| http://www.brownmckinney.com/tim Website
215-825-2250 x 1007 Office | 267-879-2716 Mobile | 267-318-7004 Fax
1 vote Thank Flag Link Mon Feb 7, 2011
What does your contract say? What does your agent advise? If the lines are still blurry your agent can speak to their broker who has access to legal advice. Councel is fine but, you may not need an attorney just yet.

Good luck,

Sandy Farmer
Realtor, GRI, CSSN
John Hall & Associates
homesales411.com
Web Reference: http://homesales411.com
1 vote Thank Flag Link Mon Feb 7, 2011
What is your agent advising....for any legal rights you may have, consider consulting with an attorney who specializes in real estate, he/she can best advise as it relates to your specific situation....
1 vote Thank Flag Link Mon Feb 7, 2011
You do have the right to choose your lender. However, the seller also has rights and refusing to make amendments to the contract is one of them. Their agent may have heard negative things about this particular lender or had bad experiences with them personally. As an agent, it is our duty to give advice and guidance.
The seller's agent may think they are saving their seller time and/or money by not wanting to accept the change, and they could be right. Without knowing the complete story, this is the best response I have to your question. Best of luck to you!
0 votes Thank Flag Link Mon Feb 14, 2011
I have heard nothing about you having a Buyer Agent in this transaction. Were you trying to do this as an unrepresented buyer? If so, I'm sorry that you assumed you could do this alone. It is always a good idea to have an agent who can represent you so that when these situations come up you have someone that you can count on to answer your questions and possibly negotiate the terms of the contract to accommodate both parties so that it is a "Win-Win" for everyone. Normally, a Buyer Agent doesn't cost you anything and can save you a lot of grief and money as that person does this every day and know the "bumps" in the road. The Seller's Agent works for the sellers and the sellers expect their Agent to give them guidance. Under these circumstances, if you do not have an Agent to try to convince the other party to change the terms of the agreement I'm not sure that you will be able to do much about it. I would think that it would be in your best interest to consult your attorney; however, I'm not sure that you are going to like what you hear. If you feel that you need this loan to help you with your goals I would try for another house. That way you can get everything in order with your bank before you look again. And, if you do not have your own Buyer Agent to represent you please do yourself a favor and find a good one. Really, you will be glad that you did that most of all.
0 votes Thank Flag Link Sun Feb 13, 2011
Without knowing the exact details of the deal, I would recommend having a detailed conversation with your buyer agent. If they are not experienced enough with the situation, meeting with your buyer agents broker may be helpful to you as well. If this has been done and you still are not clear as to your rights, consult with an attorney. This is assuming you have a buyer agency agreement, if the agent is "agent for the seller", consulting an attorney, may again, be in our best interest.
Best of luck.
0 votes Thank Flag Link Sun Feb 13, 2011
When selling a home, the seller's agent has a duty to protect their client. The final decision, however is always up to the seller. Without knowing more details about the mortgage institution you want to use, I can't opine on why the seller's agent is giving this advice. However on the face of it, I do not think there is any unfair practice. While there may have been an oral agreement to extend the terms, it must be in writing to be binding.

Given the rejection of your reasonable attempts, while I'm not an attorney, I don't think it is likely that you will lose your deposit money. In Philadelphia both parties must sign off before an escrow is released. Good luck in resolving the issue to buy your new home in Philadelphia. You might want to ask the seller's agent if there is a solution to which the seller would agree in order to extend settlement so that you could change the type of loan in the agreement. Usually both parties do not want the deal to fall apart.
0 votes Thank Flag Link Tue Feb 8, 2011
Hello, Advice of the Sellers Agent is just that. If you get a commitment from ANY bank to purchase it should be fine. Do know several Agents who are not pleased when they receive offers from .com Lenders. Good Luck!
0 votes Thank Flag Link Mon Feb 7, 2011
You can use the lender you want to use, and the seller can opt to not amend the terms of your fully executed agreement.

Perhaps the listing agent and/or seller has already been burned before by other buyers who went with your lender, or maybe the seller is dealing with a hard deadline (meaning it's set in stone and can't be changed).

is it more important to you to buy that home or to use that lender? Choose wisely.
0 votes Thank Flag Link Mon Feb 7, 2011
Yes, I understand that. However - in my opinion, they can use whatever criteria they want to agree or disagree to amend the contract.

I agree with you that you should be able to use whatever lender that you choose. However, that doesn't mean that you get to change the agreement to accommodate it. I don't blame you for being sore, either, by the way!
0 votes Thank Flag Link Mon Feb 7, 2011
Thank you for all your posts. I'm not trying to unilaterally extend the settlement date, the seller has already said they're ok with that. They also said they're ok with me switching my type of loan. They've actually switched their "reasons" between the settlement date and the type of loan to prevent me from using my bank. When they told me their issues with my bank included the settlement not closing on time, which can happen with any lender, I offered to pay the seller's interest on their loan and rent for the property on top of that. When they said that was too complicated of a deal, I offered to increase the sell price. At this point I'm proceeding ahead with a different lender, but as a home buyer, this seller's agent is raising so many flags that I wonder if she'll be a problem later on down the line. And as a buyer, I hope there is something I can do to protect myself from anything else she will do to me.

Thanks.
0 votes Thank Flag Link Mon Feb 7, 2011
Good point, Alan! And of course, this all could have been avoided by making a call to the lender before agreeing on a settlement date. C'est la vie.
0 votes Thank Flag Link Mon Feb 7, 2011
You may have some rights, but I'm pretty sure you don't have the right to essentially unilaterally decide to extend the closing date.

Financing has become a big obstacle in meeting deadlines and actually closing transactions. Here in the Pacific Northwest, for anyone who's interested, our contract indicates that the buyer will make full loan approval within a brief time, and if they change lenders without the consent of the seller after that, their financing contingency will default and they will lose their earnest money if they don't close on time.

I don't think that you can force the Seller to accept your changes. You may be able to convince the listing agent, however.

All the best,
0 votes Thank Flag Link Mon Feb 7, 2011
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