Steering or not?!

Asked by Noelle, California Wed Apr 17, 2013

I am in the market to buy a home in So Calif. you could imagine the competition. Despite, my agent reassures I look great and my offers should be considered at the least. I am prequalified with Wells and a direct lender that my agent often uses. Well she was right, but we often get counter offered that we are required to cross qualify with the sellers broker/lender before my offer is even considered. I don't have a problem using their lender if my offer is accepted, but to require me to do so beforehand?? We've encountered this a total of about four times, REO's and standard sales the same. Personally I think this is ridiculous! Is this steering or not?

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Noelle, Home Buyer, California
Wed Apr 17, 2013
Thanks to you both. It does clear things up and yes it's a pain in the butt. I'd be happy to provide all the docs to the sellers lender to see the details of how I am prequalified, but that is all, and yet it's still not enough. Inventory is low and it is a sellers market and believe me, listing agents are taking full advantage. It certainly is all business in real estate. Thank goodness my agent is on it, I'll get there :).
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Terry Farnsw…, Agent, Lisle, IL
Wed Apr 17, 2013
This has nothing to do with steering.

There are two reasons why they sometimes require this:

1. They want to keep the loan - as stated below.

2. They want to make sure you are truly qualified and will be approved for the financing. Although you may have a legitimate pre-approval from Wells Fargo, they don't know specifically what the criteria your lender used when qualifying you.

Requiring you to qualify with their lender gives them a "lead" and the opportunity to sell you on their lender, and also acts as a "double-check" for the seller that you will be ultimately be approved.

Hope this helps!
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Ron Thomas, Agent, Fresno, CA
Wed Apr 17, 2013
A lot of people have complained:
The Lender just wants to keep the Loan on that house, in-house.
Being a Marketing major; I can see both sides of that coin.

Normally, we can see that requirement before we make an offer.
A simple phone call to the Listing Agent can confirm this.
It is not illegal nor unethical. Just a pain in the behind.
As a Buyer's Agent is try to avoid these, for my client's sake; but with a dwindling inventory.....
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