Real Estate agents requiring certain lenders? (sale, foreclosure, mortgage broker) - Atlanta - Georgia (GA) - City-Data Forum

cmills · 06-22-2008, 08:40 AM

In trying to purchase a property, I've come across something I've never dealt with before. The listing agent has informed me that I MUST be pre-approved by a certain individual at a certain lender before we can proceed.

Never mind that I already have pre-approvals from two other lenders.

Now, I can see this in new construction, but this is a resale, a home that has been on the market for over a year. We've done the inspection, agreed on the repairs to be done, had the appraisal...we're in underwriting with our lender and hit a snag where they may require more of a down payment because of the Declining Market list. Since we were at the end of our due diligence period, I requested more time so that we could be sure that we HAD the new required down payment and not risk our earnest money.

The selling agent came back with the demand to use her guy.

We canceled the contract.

Is that crap normal or do those poor sellers have the worst agent ever? This whole thing has only taken 11 days to hit bottom.

masonbarge · 06-22-2008, 10:34 AM

I'd send a letter to the owner, telling him why the sale didn't go through. Make sure to stick to the facts.

George Chong · 06-23-2008, 06:06 AM

Was the property in foreclosure? Sometimes listing agents require that buyers get pre-qualified before making an offer.

Three things:

1. Even if the listing agent required you to get pre-qualified with her guy - there is no requirement that you must use him to obtain the loan.

2. If you were willing to go through with the sale, despite the property being identified as being located in a declining market area and if you would be willing to put down a larger down payment, the listing agent cost herself a possible sale. If you were in underwriting, then it's quite obvious that you were pre-qulaified for a loan. A lending institution would not expend the resources if it didn't think that you were qualified for a loan.

3. If you are in underwriting, what would be the purpose of still requiring that you get pre-qualified through her lender? Was it agreed upon in the contract? Otherwise, there is no verbiage in the main contract that requires you to be pre-qualified by a specific lender.

cmills · 06-23-2008, 07:39 AM

George, her demand came when my agent tried to add a special stipulation that if we could not secure a 95% loan, our earnest money would be refundable. We wanted that added because we'd originally been approved for 5% down, and we could go to 10%, but if the lender required 20%, we'd be screwed.

And that answer was not available until today.

The property is not in foreclosure, but it could be close. The owners were transferred out of state and it's been on the market for a year. We offered something close to $100k off the original asking price and they accepted.

We canceled the contract, but we're still interested in the property. She doesn't want to see another offer from us unless we use her guy. We're going through a broker that we've used before and trust, but I also have pre-quals from two Big Banks; I don't know why that isn't good enough for her.

cmills · 06-23-2008, 07:44 AM

Oh, and George, how long does underwriting usually take, in your experience? Because there were only 8 business days involved in this transaction, but the agent seemed to think that meant the 'lender couldn't come through with their promises'.

George Chong · 06-23-2008, 07:49 AM

Quote:

Originally Posted by cmills

George, her demand came when my agent tried to add a special stipulation that if we could not secure a 95% loan, our earnest money would be refundable. We wanted that added because we'd originally been approved for 5% down, and we could go to 10%, but if the lender required 20%, we'd be screwed.

And that answer was not available until today.

The property is not in foreclosure, but it could be close. The owners were transferred out of state and it's been on the market for a year. We offered something close to $100k off the original asking price and they accepted.

We canceled the contract, but we're still interested in the property. She doesn't want to see another offer from us unless we use her guy. We're going through a broker that we've used before and trust, but I also have pre-quals from two Big Banks; I don't know why that isn't good enough for her.

It just all sounds fishy. I certainly understand that you want like to stay on "principle", but would it really be that bad to use her person to just get pre-qualified again? Like I stated earlier, you can still use your own mortgage broker to obtain the loan. Just look at the final goal - closing on the property that you want.

Also, I would ask that your agent do a little homework. Ask your agent to ask her why does she insist on having you pre-qualify with her person. Perhaps your agent can be persuasive and convenience her that it is an option that you are not very fond of doing and could jeopardize the deal.

cmills · 06-23-2008, 07:55 AM

Yeah, we can do that, it just seems a strange request, and out-of-norm.

George Chong · 06-23-2008, 08:03 AM

Quote:

Originally Posted by cmills

Yeah, we can do that, it just seems a strange request, and out-of-norm.

I don't disagree with you that this is possibly out of the norm. It is a question of whether or not you are willing to go through that hoop that has been requested of you by the listing agent. As I advise my clients, this is a business transaction so try to keep your emotions out it as much as possible.

If this requires you one additional step and it costs you no additional money, is it worth it to you to get the house for $100K less than asking price? It is literally the $100K question.

cmills · 06-23-2008, 09:06 AM

I called the guy, he didn't answer and hasn't called me back. How much you want to bet that I hear from underwriting first? lol, that'll be a hoot..."I realize that I have already secured a loan that is ready to close, but can I get a pre-approval from you, please?"

tania0521 · 06-23-2008, 10:53 AM

You mentioned that you offered 100K less than the asking price - yes they did accept at the time but maybe someone wanted to offer MORE - by making it difficult for you to close and getting you to cancel the contract now they are open to accept a higher offer. Have your agent look into it immediately. If the home was on the market for close to a year - and they were willing to accept an offer of 100K less then they should be begging you to close with ANY bank - It only makes sence to me that they have another offer WAITING in the wings