Scottsdale, AZ · Member since 2013 · 70 posts · 17 votes
I preapproved a borrower to put in an offer, but the listing agent denied the offer because it was from a big bank. There is a misconception that my bank won't finance a "flip" transaction. Our guidelines clearly state that we will, so I forwarded to the buyers agent, to forward to the listing agent. The buyers agent sent the clients to a broker thinking their prequal would do the tick but I tried to get it through to him that since the loan is under the conforming loan limit, the guidelines will be set by FNMA or Freddie for any lender.
Any suggestions on what I should do here. Is this ethical for the listing agent to do?
Virtually no listing contract contains an out for a seller for "contingencies." A ready, willing and able buyer offer can include a financing/inspection contingency. I've never seen a listing contract address contingencies of any type. IMO and experience.
This makes no sense to me. A buyer is not "able" unless they have the money. And until they get a clear to close from a lending institution's underwriter, they don't have the money. So, until they get that CTC, they are not "able" to purchase the property.
I *very* often will discriminate against buyers based on their lender. We've sold a lot of properties in our area, and we see the same lenders/brokers over and over. There are several brokers we won't do business with anymore because they failed to perform in past transactions (or were just idiots).
A seller can't be forced to accept an offer, and other than the few obvious legal requirements against discrimination (Fair Housing Laws), a seller can turn down a buyer for any (or no) reason whatsoever. Including not liking the lender.
Here's an example to think about: Let's say you have a property that's gone through 5 title changes in the past 2 weeks. Now the seller wants to sell it for $100K increase in value with no work done. There is ZERO percent chance that an FHA underwriter would approve a loan on this property. But, let's say that a buyer's idiot mortgage broker says, "Oh, that's not a problem...I can definitely get this loan done." And he issues a pre-qual letter. We all know it's not possible, but are you saying that the seller has to accept the offer because the buyer has a pre-qual letter?
Bill Gulley Uh hum...real live real estate BROKER in this here thread:) Just for the record.
Lots of strong opinions on this issue. Interesting.
Some things I concur with: there are lots of "idiots" in the mortgage biz, but I add "at least as many" in the "agent" biz.
Fortunately I never see sellers declining an offer simply based on the lender's company name. But I did see it back in '07 when the mortgage companies were crumbling to the ground: we had pre qual letters from virtually every lender that were worthless for a multitude of reasons.
Yes I agree, there are some very good ones, they would be successful in probably anything they attempted.
Sandy, are you saying you're a broker?
I didn't say it quite like that, my point was that brokers education goes beyound that of agents, RE law, agency relationships, supervision, compliance, etc.....geared to keep agents out out of trouble thereby keeping themselves out of trouble.
BTW, when a bank is closed it's usually hours before operations resume, loan files continue to process or are taken by others, that's the goal. The reason FDIC came to being was to eliminate the run on banks, spread by rumors/
J. Scott certainly nailed it, "a low barrier to entry", in both areas. The problem I've seen is the loan officer/originator being a low level application taker with limited background, some have the ethics of bar fly. Just to pick'n on the lender's side giving equal time (LOL).
And, in Mo., not sure if it's in effect yet, they were talking about requiring a 4 year degree (in anything) for an RE agent to get a license, that would improve the pool. Same should be done in Mtg Org. as well, IMO. Just a comment, don't mean to start the education stuff again.
Anyway, as a seller, I can't see cutting off your nose to spite your face, while you may not like a lender, who cares so long as the money is there. If the lender is bad or the loan officer, as J. Scott mentioned, go after them for messing it up, there is lender liability.
Rarely is it the bank, it's some individual. :)
"Low barrier to entry" is right on IMO. I've been saying for years that I wish MLS dues would go from the peanuts we pay now to $5K a month. Only the professional folks would be left standing.
I doubt anyone worries about BoA, Wells, or any other big bank not having the funds to do a loan.
It is much more likely like someone mentioned about seeing an institution not perform multiple times by doing poor upfront qualifications of the borrower and/or the property.
Fair or not big banks will have this stigma more since they have so many employees and do so much volume no particular loan, or strong relationship with any professional will really effect the bottom line.
As far as the low barrier to entry goes I agree that it would be nice to not have any dope be able to get licenced easily.
I think the 4 year degree is silly. All that tells me they made a very poor financial decision and can't get a job in their field.
Jacking up MLS fees don't make sense to me either since you will new agents who are building their business and you eliminate a ton of investors that only have a license for MLS access.
What they should do is increase the initial training, make the test hard, and make CE requirements tougher.
This kind of changes will make it so an agent actually knows more about REAL ESTATE, which is the point right?