BUYERS, DON'T BOTHER PREQUALIFYING WITH "YOUR" LENDER ~ BECAUSE MANY LISTING AGENTS ARE DEMANDING YOU USE THEIR LENDER. OR "THEM"

By
Real Estate Agent with MOUNTAIN COUNTRY REALTY, Lake Arrowhead. (909)-273-4542 BRE 01235311

Recently I posted a VENT (read it here) about listing agents DEMANDING a buyer pre-qual with a specific LENDER. I even called CALIFORNIA ASSOCATION OF REALTORS (  C.A.R) and the attorney did say it is LEGAL, IF the Realtor has a SIGNED AGREEMENT with the repo bank, though he (the attorney) could see problems arising from it and did bring up the word RESPA "Hummm. Good point, I told him."

So, yesterday, I get a call from a client wanting to see a particular property.  I pull up the listing off the MLS to get the "Showing Instructions." Right after those remarks, I read (and my blood pressure shot up), the following: Buyer must be prequalified with sellers lender.  

GUESS who is the seller's LENDER?   This REALTOR!!!!    (Yes, he is a Realtor/Lender...plus he loves the the word EXPERT, as it's all over his advertising).

I have to tell you, I am getting more and more upset uptight, disgusted, pissed off about this NEW practice.  And if something isn't done soon, we're (Realtors) going to lose the rest of what little respect we do have, from consumers. 

This NEW PRACTICE smells like a bowl of peeled, rotten eggs and makes me sick to my stomach. And IF my clients ask me how I feel about it when this issue pops up, be sure I will tell them exactly what I AM THINKING.

 ...AND I plan to keep spouting off about it as often as possible!!!

**** JUST ADDED: I think what Vicki (#21) asked about Cross-Qualifying may be a happy medium to this situtation, as it is NOT DEMANDING that the BUYER QUALIFY with XYZ, it just asks that THEY CROSS-QUALIFY.  I'll think about this a   while...

~ ~ ~

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Topic:
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California San Bernardino County Lake Arrowhead
Groups:
Everything California
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Southern California Real Estate Forum
Tags:
prequal
listing agents
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red flag
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Kat DeLong
Realtor BRE#01235311, Lake Arrowhead Real Estate (
MOUNTAIN COUNTRY REALTY, Lake Arrowhead. (909)-273-4542

Woo-Hoo: AGREED 100%... BUT it is happening here MORE and MORE and I loathe it!!!

Thanks for commenting

June 06, 2009 09:27 AM
Rainmaker
153,216
Vicki Pedersen
GRI, ABR - Riverside and Corona CA Realtor
Pedersen Real Estate

Kat, Being in that same market of Southern California, I agree that this practice is bad (for the most part).  But I know have a different take on it.  I have a new listing - people were in escrow with their previous listing agent. The buyers had a pre-approval from a fly-by-night lender -which ended up being meaningless.  Eventually the transaction was cancelled because these people could not get a loan.  Now I have the listing.  The sellers are so afraid of that happening again.  We are asking that any buyers with a pre-approval from a lender that is not recognized be cross qualified with the loan person I trust.  This is like insurance for my sellers.  A pre-approval from a major lender likes Wells Fargo, or BofA won't need that cross qualification.  And we aren't trying to steer business away from anyone's lender.  In this type of situation, what do you think of asking for a cross qualification?  I'd love to hear your opinion.

June 06, 2009 05:43 PM
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Kat DeLong
Realtor BRE#01235311, Lake Arrowhead Real Estate (
MOUNTAIN COUNTRY REALTY, Lake Arrowhead. (909)-273-4542

Vicki: I so agree that NO ONE should use though fly-by lenders. NEVER.   And, every case is different.  My take is, I ALWAYS have had my buyers PRE-QUAL'd or Approved with reputable lenders, as we were ALL taught to do when we started in R.E.  

I just really get a bad taste in my mouth when I have a GREAT buyer who has done ALL the right things and then is TOLD, "So who cares if you're pre-qual'd, YOU'RE still going to HAVE to BE PRE_QUAL'D with my lender. 

CrossQualfication can be okay..if it isn't nicking my buyers credit scores 

We all have to do what is best for our clients in the end.

Thanks Vicki, for your take on this. I appreciate it.

 

June 06, 2009 06:25 PM
Rainmaker
1,148,912
Elizabeth Weintraub Sacramento Real Estate Agent, Top 1% of Lyon Agents
Put 40 years of experience to work for you
Lyon Real Estate

There is an upside to this, if you think about it. We see this all the time in Sacramento. Primarily, the listing agent (and sometimes the seller cares, too) wants to know that the buyer is truly qualified. There are those back-burner agents-slash-mortgage brokers who sometimes issue prequal letters for buyers that are bogus. Then the seller has sat in escrow for 3 to 4 weeks before anybody discovers that the buyer's lender can't perform because the buyer wasn't properly qualified. It happens more often than I'd like to think.

The lender does not demand that the buyer get the loan through that lender. The buyer is still free to choose his or her own lender. But the upside, I'm getting to this, is the fact that in Sacramento, almost every desirable listing is receiving multiple offers. On top of this, the poor mortgage rep who has to prequalify all these buyers realizes that only one buyer will win the offer, and that buyer may not use that mortgage rep for the loan, so all the work that rep has done is in vain.

OK, OK, so the upside, the upside is the mortgage rep KNOWS how much all those other buyers are offering for THAT HOME. This is where you can find out, if you do it properly, the amount a buyer is bidding against, if you get my drift.

sacramento short sale agent

June 07, 2009 11:02 AM
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Kat DeLong
Realtor BRE#01235311, Lake Arrowhead Real Estate (
MOUNTAIN COUNTRY REALTY, Lake Arrowhead. (909)-273-4542

Elizabht: LOL  I like the "Upside."   Thanks for sharing! 

  You know, I SHOULD clairfy that there are a LOT of wonderful lenders & Realtors out there.... that said, I'll stop.  :)

June 07, 2009 11:57 AM
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