Home Buying in Utica>Question Details

Mamaleina, Both Buyer and Seller in Utica, NY

Should seller's agent be coordinating with mortgage broker in favor of seller?

Asked by Mamaleina, Utica, NY Thu Apr 14, 2011

As I prepared to put an offer on a home, the seller's agent strongly recommended one loan officer, tossing in a couple other names because she said she's required to. That probably should have been a red flag, but I went with the one she recommended. I was pre-approved quickly and everything seemed great. My first offer wasn't accepted. The agent told me the minimum amount that the seller would accept. I was willing to negotiate, but needed to know what kind of numbers I was looking at, so I asked the loan officer to calculate the monthly payment based on a scenario I was considering. She called a few hours later, but mentioned that she had spoken to the seller's agent and knew that the seller would not accept the offer because it was below her bottom line. I had not talked to the agent myself yet, and I felt betrayed. The calculations she gave me were based on the seller's bottom line, not mine. Am I right to feel like something's wrong with this picture?

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If the house was listed for a price, and you are offering 95% of asking and the seller is saying that is below there bottom line, then I would say that the seller's agent has been misleading the seller. It is a rare exception when a home sells for over asking price. Appraisals now have a listing comparable, and will show an amount that is deducted for what the average home sells for below listing. 5% is very normal. In some areas it's more than 5%.
1 vote Thank Flag Link Fri Apr 15, 2011
Hi, Agents tend to refer service providers to ensure a smooth transaction. In NY we are taught to recommend three of each and let you the buyer choose who you want to use. You have every right to feel uncomfortable, it's like the sellers agent recommending a home inspector to you. I would never do that because I always know the sellers agent has the sellers best interest at heart. You should try to find a buyers agent to work with who can then deal with the sellers agent.

Christopher Pagli
Licensed Associate Broker
Accredited Buyer Representative
GREEN Designated Agent
William Raveis Legends Realty Group
914.406.9023
1 vote Thank Flag Link Fri Apr 15, 2011
I would feel uncomfortable if I were you too. I am sure that the agent was only trying to make sure the deal got done by recommending that loan officer, but the loan officer was certainly out of line to tell you what she did, although I will say that there are times that I think that the potential buyer I am talking to is being unrealistic, and I want to make sure they are going to be qualified for a particular purchase price, whether on this house or something else. It is still going to be difficult for the loan officer to qualify you, because there is no way that they can predict what rates will be once you have all your ducks in a row and are ready to lock in. You have to wait until you have a buyer, know that they are approved and ready to close, then you can think about locking in. If, for some reason, the seller needs to delay while they find someplace to buy or rent, you could have another delay.
Where in the Utica area are you buying? I went to school up there.
1 vote Thank Flag Link Fri Apr 15, 2011
Is the Seller's agent also your agent? If so, then she is a transaction agent who facilitates the transaction. In which case, confidential information should not be disclosed to Seller about the Buyer or to the Buyer about the Seller. If a Buyer's agent is representing you, why has that agent suggested that you shop around for a lender? Call two or three to learn the rates and fee structure each offers.
1 vote Thank Flag Link Thu Apr 14, 2011
The agent is working for the seller. The loan agent was recommended by the agent who is working for the seller. You are working with the loan agent who was recommended by the agent who is working for the seller. This is my definition of sleeping with the enemy.

Is anyone looking after you best interests? NO!

Get your own agent and find a new lender. You certainly need a lender who does not relay your information to the agent who is working for the seller.
1 vote Thank Flag Link Thu Apr 14, 2011
Hello Mamaleina,

You certainly should feel like someone made a mistake. The mortgage lender forgot that they are working for you, and as a SELLERS agent that agent has an OBLIGATION to the seller first. Which means the list agent does not owe the Buyer confidentiality. Because of the magnitude of the purchase and numbers issues that could arise in a real estate transaction, the State of New York created the Buyers Agent/ Agency to protect consumers. I can not say for sure if something wrong did or didn't happened here. Either way, I agree with the other agents that You Should get a Buyers Agent to lookout for your interests. A Buyers agent is OBLIGATED to work in your best interests.

Now depending on what paperwork you signed, and how the paperwork was filled out when you made your offer you may be stuck working with that agent on that particular house. You can change lenders now. If you haven't paid any loan initiation fees it may be in your best interest to go to someone you feel more comfortable with. It is important to feel comfortable that the people you have working for you are doing just that, working for you.

I also see that you are a seller. I am assuming that either you have a home that will need selling and made a contingent offer, or you are in the process of selling your home. Your listing agent could help you by representing you on the buyer side as well. If you need more help or need to interview an agent, you can contact me via email at zisiss@kw.com.

Good Luck,

Zisis Sakellariou
1 vote Thank Flag Link Thu Apr 14, 2011
I agree with William below in that you may have been better off getting your own representation. It's always good to do some due diligence when applying for a loan and see what options you have out there.

Hope everything works out for you
Chris
Web Reference: http://www.chrissuh.com
1 vote Thank Flag Link Thu Apr 14, 2011
Good morning Mamaleina,

You are right; something's wrong with this picture. Your Loan Officer must keep all information confidential. If she has any conversations with the Seller's agent, the nature of those conversations should be limited to the Loan Officer's experience in the business, Licensing, and the nature of the company where the L.O. works (Direct lender, regular bank, mortgage broker). Your L.O. may inquire of the Seller's agent for specifics about the property such as condition, property taxes, and other information that would help your L.O. to help YOU.

While many of us Mortgage Bankers receive referrals from local Realtors, there is a fine line we must walk in those relationships. The fact your L.O. was discussing the Seller's "bottom line" with you is a red flag over the nature of her relationship with the Realtor; it's a bit too "cozy" if you ask me.

While the L.O. didn't do anything illegal, you are right to think the L.O. isn't really on your side. Move on and find another Local Mortgage Banker to work with.

Trevor Curran
NMLS #40140
0 votes Thank Flag Link Sat Jul 28, 2012
Thanks again. I was preapproved for much more than the asking price, but my personal budget is lower. My original offer was a bit more than 95% of the asking price, and the scenario that I asked the lender to review for me would have been 97%. I could understand the lender feeling like I was being unreasonable if I was trying to lowball the seller, but I think I was completely in line with typical negotiations. I feel like she's concerned with buttoning up the deal as quickly as possible, not whether I'm comfortable with it. In this day and age when so many people are defaulting it's really astounding that a loan officer would encourage me to pay more than I'm comfortable with. I really appreciate all the advice I'm getting here. I think I was more than a little naive going in, but I won't make the same mistakes twice.
0 votes Thank Flag Link Fri Apr 15, 2011
In the future, do consider interviewing in person a few local agents from different realty companies and choose the one you like best--you are free to work with whatever lender you like, an agent cannot force you to work with his/her preferred lender...for future reference, do be aware that a mortgage pre-approval letter is required in order to determine your price range and for any offers to be taken seriously--therefore visit with any qualified loan officer of your choosing regarding mortgage qualification, before embarking on a new search.
0 votes Thank Flag Link Fri Apr 15, 2011
Hi Mamaleina,

WOW...this screams of violating fiduciary duties. Start fresh...perhaps a 'buyers agent' would be most beneficial. This is supposed to be the beginning of a new wonderful adventure! Best of luck!
0 votes Thank Flag Link Fri Apr 15, 2011
Thank you for all of your answers. To provide a little more info, my offer was contingent on selling my own home. I really liked the seller's agent and was going to have her sell mine too. People told me (maybe incorrectly) that the agent would then work for both of us, so the seller wouldn't be at as much of an advantage. The problem is that my house is not on the market yet, so the agent has no vested interest in me as of now. I knew that dealing directly with the SA is dicey, and should have gone with my gut. As for the mortgage lender, she is not affiliated with the realty company, but obviously she and this agent help each other out. I don't feel that it was her right to run my potential offer past the agent before I did! I will definitely be working with a different lender, and probably walking away from this house. Thank you everybody!
0 votes Thank Flag Link Fri Apr 15, 2011
My recommendation is to obtain your own financing and not use the seller's recommendation. There has to be a level of confidence and the sellers broker has information that protects the seller.
0 votes Thank Flag Link Thu Apr 14, 2011
Absolutely agree with last response. Although absolutely legal (except for FHA loans where mortgage broker cannot be involve with financing), you are better off to have independent representation.

In most cases, you do NOT save anything by going with the listing agent.

Good luck.
Terry
0 votes Thank Flag Link Thu Apr 14, 2011
Mamaleina...do you have a Realtor representing YOU? Get one! it is not too late. Also, please find your own mortgage broker....I would be happy to recommend one if you like...I have no interest in the deal.

Gail@gailgladstone.com 631-425-6150
Web Reference: http://gailgladstone.com
0 votes Thank Flag Link Thu Apr 14, 2011
To avoid this problem and many others; when one is Buying a home it's is best to work with a Buyers Agent Agreement. This way the agent has your best interest in mind and will work to get the best deal for you (the buyer)! Would you have the sellers lawyer do the closing for you?...... Than why would you buy through his broker? I'm William (Cuz'n Billy) Teague and I approve of this message!
0 votes Thank Flag Link Thu Apr 14, 2011
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