Home Buying in Mount Vernon>Question Details

Sagittariusrn, Home Buyer in Mount Vernon, NY

We made an offer on a house, the sellers wants us to go through their mortgage rep - is this legal?

Asked by Sagittariusrn, Mount Vernon, NY Mon Sep 26, 2011

Our realtor said they liked the offer (according to the sellers' realtor). They wanted us to listen to a presentation from their mortgage person - we said no. Now the sellers are saying we were not serious about the offer. Can they turn down our offer because of this?

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I do not blame a seller for wanting to guide the buyer’s financing to someone they trust. There are a ton of prospects walking around with pre-approval letters from loan officers and the prospects are not even remotely qualified to buy a home. I know because of the train wrecks I see when deals are stacked one behind the other.
The National Association of Realtors reported that 16% of the pending sales in June were cancelled. Some large title companies report as many as 30% of their title orders are not closing. Either number should cause a seller to be concerned.

About the seller not accepting your offer, I have always been told a seller can reject any offer that is not full price and all cash. If the seller is agreeing to pay some of the buyer’s closing cost they certainly have the right to be choosy about the lender. In your case you indicate all they ask is that you listen to their lender’s presentation, in my book that is not out of line. I believe all sellers should require a second look by the lender they trust. Otherwise, they risk tying up their home with a buyer that has a 16 to 30% of not closing.
1 vote Thank Flag Link Mon Sep 26, 2011
More and more REO, (particularly) are trying this tactic:
I can't blame them; they want to keep the loan in-house.

Just talk to them, can't hurt and you will another set of numbers to compare to. Be sure to get a GFE.

Good luck and may God bless
1 vote Thank Flag Link Mon Sep 26, 2011
Are you sure it's only about using their mortgage referral? Maybe the Seller and/or the Listing Agent simply wants another opinion about your mortgage qualifications. They may have had a bad experience previously with a "preapproved" Buyer and the deal never closed after months of heartache. If that's the case, you can't blame the Seller for asking a trusted mortgage professional to verify your ability to obtain financing. I receive many "911" referrals on deals that are kicking around for months with another mortgage lender and when I review the qualifications, too often it turns out the Buyer was NEVER qualified for the requested financing.

Maybe they're not arm-twisting as much as asking for that second opinion from someone they trust.

It certainly cannot hurt you at all to spend a few minutes reviewing your qualifications with their preferred mortgage professional. If a credit report is run for mortgage purposes, you won't experience any effect on your credit scores, so there's no harm to you in this second conversation.

And who knows? You may find you like the Seller's mortgage professional better than the person you're working with.

Trevor Curran NMLS #40140
tcurranmortgage
0 votes Thank Flag Link Tue Sep 27, 2011
As said, they can turn down your offer for any reason if it is not the listing price. Is the seller a person or bank? If a bank they can require you to get preapproved by their perferred lender, but cannot make you use the lender. If it is a person, they may be fearful that you do not qualify for a mortgage. Have you been preapproved by a mortgage officer that has their preapproval underwritten? If so speak with you realtor about the situation and take their advise.
0 votes Thank Flag Link Mon Sep 26, 2011
It sounds like the sellers are "suggesting" you consider another lender (their lender) as an option to financing. Could not hurt. Good luck!
0 votes Thank Flag Link Mon Sep 26, 2011
Yes, it's legal. There's a fairly long, recent thread here on Trulia about a very similar situation.

The seller can decide not to sell to you because you have a dog. Or because you drive a Ford. Or, yes, because you won't use a specified lender.

The reason is simple: The sellers want the deal to go through. They have faith in their lender's ability to close a deal. They're not as confident about other lenders. And they've got some basis for concern: Lots of buyers are finding lenders on the Internet. The lenders may be thousands of miles away, with no knowledge of your area and little experience with your type of property. Online lenders often promise really attractive rates, then sometimes end up not delivering on them. And there's no accountability--that other lender can only be reached through some 800-number.

Having said that, of course there are good online lenders. And there are plenty of good local lenders, too. Were the sellers wise to reject (or consider rejecting) your offer just because you aren't using their specified lender? Maybe not. But it's their right.

Beyond that, I'm not sure it was wise for you to decline to listen to the presentation from their mortgage person. It's possible that their lender was offering competitive rates and high-quality service. I'd have at least listened. Then, I'd have made a decision. But the sellers may have interpreted your refusal to even listen as being "not serious." You ought to choose the best lender for you. But that means considering different lenders and then choosing.

Advice: Ask your Realtor's opinion. Ask your Realtor whether you should say: "We'll be glad to listen to your lender's presentation. But we reserve the right to select the lender who we believe will best serve our needs."

Hope that helps.
0 votes Thank Flag Link Mon Sep 26, 2011
Don Tepper, Real Estate Pro in Fairfax, VA
MVP'08
Contact
Do you already have a mortgage pre-approval letter from your lender; the sellers can't force you to utilize a specific lender, you have every right to choose whoever you wish; they may want their specific lender ro re-verify your financial information; what is your agent advising; for any necessary legal advice, do consult with an attorney who specializes in real estate...
0 votes Thank Flag Link Mon Sep 26, 2011
Have they signed it? If not they sure as heck do not have to and can reject it for any reason. If they signed it then they are bound by what it says. I would talk to their lender to see what they say, can't hurt.
0 votes Thank Flag Link Mon Sep 26, 2011
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