Hello and a seemingly unusual request

[Matt&Alicia]

Hello!

We are new here and want to introduce ourselves and ask a question. This is a great resource! My husband and I are in the processes of searching for our first house. We put in a bid on a wonderful colonial. Here is out situation:

The seller's agent countered our bid by saying that our offer is being considered but the seller wants us to get a preapproval letter from his own mortgage lender. We have already sent a preapproval letter along with our offer. This should be enough, correct? The reason we were given for this request was that the seller's situation is time sensitive and he wants to be sure potential buyers can qualify for a mortgage easily. My question is: Is this legal? If it is legal, is it ethical? Wouldn't doing this be a conflict of interest for the mortgage lender? Could this be a way for the seller to find out how much we can potentially afford and use this to his advantage in negotiating the highest price possible?

Any answers would be greatly appreciated, as we are very new to this. Thanks in advance

Alicia and Matt

[Cash Home Buyers _ com]

It is legal and ethical and a little weird, but I understand where he is coming from. The seller probably has experience with buyers not being able to perform even though they had a "pre-approval" letter. You will just need make them feel ultra confident that you qualify and will be able to close the transaction so you may want to ask how else you can do that or ask your mortgage broker if they can tighten up your approval letter. I would not worry about them using the broker as a negotiating tactic, as there are better and easier ways to get you to pay more. You could also get it under contract for a price with the contingency that you qualify with their broker within x days.

Scott

[Thesa]

The sellers may be close to default - if that is the case their lender may require that they qualify you or they will continue with foreclosure -

Your own mortgage broker should be able to contact their mortgage broker and help make all parties more comfortable.

This is why you use a professional Realtor and mortgage broker. Let them work for you - you were smart to use professionals.

[Matt&Alicia]

Thank you for the info

[www.OxfordTopAgent.com]

I learn something new everyday. I didnt know that a seller could do that.

[TJ2007]

Might be legal, but sounds like a dirty tactic to me!:mad:

The seller could be just worried about you really being able to qualify as 'pre-approvals' are often worth less than the paper they are printed on!!

But sounds more like either the seller or the agent are looking for a kickback from their mortgage guy.

I would advise against it. They should also know that if the new broker shops your credit you have the risk of ruining your credit score and then the deal falling apart due to that - then you are screwed.

I would suggest:
1) You could send the seller a copy of your credit report (if it looks good), so they are more at ease.
2) Have your mortgage guy call them and explain he has seen all your information income, bank accounts, credit etc & all looks good.
3) Provide a copy of the pre-approval or better a real 'Loan Commitment' direct from the lender not just a mortgage broker..

[NYorker]

Matt and Alicia,

If I were representing you, I would do the following: immediately verbally agree to do your mortgage with the seller's mortgage broker. Most likely, your current offer is very close to what seller expects to get. Set an appointment with their mortgage broker, produce all necessary paperwork (credit report, paystubs, statements, tax returns). Don't let them run your credit history again - that may lower your score. Tell the mortgage broker that you like him (her) very much and once the contract is signed, you will come to them to do your mortgage.

After your offer is accepted and you have contract signed by the seller, your agent should tell the seller that you have changed your mind about going with their mortgage broker and politely remind them that it is illegal to tie down. Then go to your own mortgage broker and do your loan there.

My clients were in similar situation. Turned out mortgage broker was some kind of a relative to the seller. May be he promised a kickback to the seller, may be not. Anyway, there is not a word in real estate contract on who should do the loan. Feel free to make any verbal promises on that :) whatever gets the contract signed :)

[Ten Lakes Realty]

Hello!

We are new here and want to introduce ourselves and ask a question. This is a great resource! My husband and I are in the processes of searching for our first house. We put in a bid on a wonderful colonial. Here is out situation:

The seller's agent countered our bid by saying that our offer is being considered but the seller wants us to get a preapproval letter from his own mortgage lender. We have already sent a preapproval letter along with our offer. This should be enough, correct? The reason we were given for this request was that the seller's situation is time sensitive and he wants to be sure potential buyers can qualify for a mortgage easily. My question is: Is this legal? If it is legal, is it ethical? Wouldn't doing this be a conflict of interest for the mortgage lender? Could this be a way for the seller to find out how much we can potentially afford and use this to his advantage in negotiating the highest price possible?

Any answers would be greatly appreciated, as we are very new to this. Thanks in advance

Alicia and Matt

Most Likely the Seller trusts their lender and wants to be sure that you really do qualify. many Mortgage Brokers say someone qualifies based on income and credit scores without really diving into the particulars of a listing. the Home may not qualify for you. I would tell the Sellers agent that you feel your protected under mortgage laws and bring to their attention that your uncomfortable with the Seller having access to your information by using "their" preferred lender. to Me, it is unEthical and you should point this out to all parties. However, the Seller does not have to sell to you. I would put on your poker face and be firm and discuss with them that they are violating mortgage and fair housing laws and that it is your right to use a lender of your choice. The sellers agent should have no doubt as to how you feel. for The seller and the Realtors involved do not want to violate Fair Housing Laws, Antitrust Laws or Mortgage laws. Know you Rights, check out the laws in your state. Knowledge is Power.

[loepl]

Is the property you are buying a foreclosure? I work with forclosure properties - there are several banks that list properties with me that require all offers to have a pre-approval from them (the bank), but the buyer is not obligated to use them for the purchase. I do not get a kick-back for this.

Basically, the bank (the seller) trusts their lenders, and wants to know that the buyer really can get a loan - that and they are trying to get more business. But the buyer can get the loan from whatever lender they want - they are not obligated to the bank (the seller) who pre-approved them.

[VinLacava]

I would try and gauge the motives of all involved. Believe me, you will be able to tell if someone is trying to play you. While technically legal, it is most definitely a weird request. Granted, the seller could just be very stringent when it comes to financial matters, however, if thats the game he wants to play, and seeing he has some type of time constraint; you could potentially have the upper hand.

Just be careful and one thing is for sure, do not give up more information than you have to. Good luck to you, I hope all works out well.