A lender sent my customer to another agent, is this ethical?

Asked by Marcia Kelly, Topeka, KS Wed Oct 23, 2013

I'm working with a buyer as a transaction broker. I recommended a lender, but my buyer went to his own bank instead. The loan officer there told him he should work with another agent. Is this ethical? Should I warn other agents? I'm very upset!

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8
Joseph Roraff, Agent, Onalaska, WI
Wed Oct 23, 2013
That's upsetting. If that happened to me I would call the bank and confront the mortgage lender myself. Who knows, maybe you might become friends and they start sending you referrals?
1 vote
Marge Bennett, Agent, Fort Myers, FL
Wed Oct 23, 2013
Have you ever suggested that a buyer work with a lender you recomend instead of the one they used for their pre-approval? Same thing. but yes, call this lender and find out why.
1 vote
No, not the same thing. Based on the property to be purchased you CAN know if Bank of America is going to sabatage everyone's effort with their FIAT appraisal and you can know that the local Home Banc will do the deal and keep their committments. What regarding an agent signals the deal is unlikely to work?
Flag Wed Oct 23, 2013
Yes, I recommended her first & said he should go with her several times; his dad, unfortunately, had more sway. He went with his Dad's lender. I guess the idea here is to put on blinders & move forward.
Flag Wed Oct 23, 2013
Mack McCoy, Agent, Seattle, WA
Sat Oct 26, 2013
I wrote, "I don't think a lender has an ethical obligation to protect our client relationship, Marcia."

Marcia wrote back, "Wait until it happens to you."

So, my reply is: I don't think a lender has an ethical obligation to protect our client relationship, Marcia.

Of course, it bites that you don't get to double end this deal. I think all of us have had buyers take our preferred lender list and roll it up to wipe bird poop off their windshields, then gone off to a loan rep who has tried to steer them to their preferred real estate agent. That's the way it is.

- I will never send anyone to this lender again.

What's changed? You never sent anyone to them before!

I know this is upsetting, BUT. Deep breath, you'll get the listing sold and closed, and you can move on.

All the best,
0 votes
Patty Clark, Agent, Denver, CO
Sat Oct 26, 2013
Having a Buyers Agency may have prevented this. I would absolutely call the loan officer on this one.
0 votes
Karen Peyton, Agent, Chandler, AZ
Wed Oct 23, 2013
While I can certainly understand you being upset, I have a question for you...Did you choose to be a transaction broker instead of representing the buyer as a Buyer's Agent (or even with agency offered through dual representation with the accompanying consent forms of the parties).? My thought is the "who represents whom" may be the reason your client was so easily influenced to choose someone else. Unfortunately as agents, we are constantly "selling" - Buyers & Sellers, proving our worth, by our time and expertise (value) to each client and transaction.

Before you cruse me dead, let me say this - your predicament has happened to me also, except in my case the lender was known to me. "Fool me once!" The lesson? I learned it! And the good news is, it's never happened again - and it won't happen to you again either!

To finally answer your question, I can think of quite a few adjectives to describe the lender's behavior, but "unethical" isn't one of them.
0 votes
Answering your question, in KS, dual representation is illegal. Im the listing agent (sellers agent), but agreed to work for both sides as a transaction broker, which is legal, in order to consummate the sale.. Unfortunately, when agent works as transaction broker, client does not sign paper corroborating this & can "jump ship." I questioned the loan officer. Her daughter-in-law is a Realtor in town. She recommended her. The loan officer said her daughter-in-law told my buyer she could work for buyer as a "buyers" agen & work solely on his behalf.. The point here is that we were going to write a contract today , but the loan officer used unfair influence . She claims my buyer said he was working with no agent (I've been working with him over a week). Buyer said he didn't say this. I will never send anyone to this lender again. Since I don't know the full story, I won't besmirch the loan officer's name. This is a small town.
Flag Thu Oct 24, 2013
Mack McCoy, Agent, Seattle, WA
Wed Oct 23, 2013
I don't think a lender has an ethical obligation to protect our client relationship, Marcia.
0 votes
Wait until it happens to you.
Flag Wed Oct 23, 2013
Annette Law…, Agent, Palm Harbor, FL
Wed Oct 23, 2013
Hmmm,,,,doesn't seem right.
What do you think your buyer said with the LO asked, "are you working with a real estate professional?"
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There's a prominate morgage broker here that benefits greatly if a buyer were to use the 'kick back' broker that makes the broker fess seem lower.
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Before you charge towards the torpedoes, get the details.
When all the facts are know, and transgression has occureed, don't you owe your community of real estate professionals a factual heads up?
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Folks need to be held accountable. Howver, you must understand, some folks refuse to be held to even these basic and low standards and will respond by going on their own 'trash talking' tour.
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Make sure you can win. I do believe mortgage brokers are more dependant on real estate professional that the other way around. Advantage agent.
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This however, does not apply to TOO BIG TO CARE banks. Expoose them.
No one leaves more buyers at the alter than Wells Fargo.
0 votes
Shaukatali K…, Agent, Katy, TX
Wed Oct 23, 2013
Kelly,
I would be upset and do not blame you at all.
Talk to the loan officer first and fnd out his side of the story.
I would definately tell all my office agent of the wrong doings and all blast out city wide.

Good luck.
0 votes
I'm mad as hell and can't take it anymore--just being a little dramatic here --lol! Shaukatali, I'm not going to keep this quiet! Thanks for your reply.
Marcia Kelly
Flag Wed Oct 23, 2013
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