Performance Boats Forum banner
1 - 17 of 17 Posts

·
Registered
Joined
·
81 Posts
Discussion Starter · #1 ·
My wife and I are looking at purchasing another home using a VA Loan. We made an offer on a property, and asked for closing costs.
The seller accepted most terms, but stated in the counter that we use a specific lender. Is this legal? It seems unethical to require us to use his preferred lender. We are already prequalified through our lender. Any lawyers or real estate professionals?
 

·
I'm baaaaack...
Joined
·
4,238 Posts
Each state has different laws. What state are you in?
 

·
Registered
Joined
·
113 Posts
Tell them your ready to go, thru your own lender. Period. I remember seeing a lot listings that said " must use so and so Title Co. " Thats BS use whoever you want. They can either accept your offer or not but they cant make you use their person,who they may have a personal relationship with. Its not legal or ethical.
 

·
Premium Member
Joined
·
264 Posts
Some of the sellers (Banks and Asset Management Co.) are demanding that you get pre-qualified with their preferred source to even accept your offer. Some of the rules change because the property may be an REO (forclosure); but it is not legal for them to demand or coerce you to use any specific lender.
 

·
Registered
Joined
·
81 Posts
Discussion Starter · #6 ·
I have no problem cross qualifying on a bank owned home. This home however was bought by an investor/real estate group at auction. They rehabbed the home and are getting ready to relist on mls. I am assuming they are related somehow to the lender they want me to use
 

·
Premium Member
Joined
·
264 Posts
The investment group may be a mortgage broker. But either way, they cannot force you to use their lender. By law, they could not refuse a earnest offer, because of your choice not to use them for your loan, its illegal. Not to say that that is not happening. I would actually look for another house, and not do business with them, but thats just my opinion.
 

·
Red Blooded American
Joined
·
15,874 Posts
The key here is you asked them to pay closing costs, they have a right to pick the lender that will be charging those costs. Case in point:
Let's say your brother owns his own mortgage company and plans to charge a couple points above par for originating the loan since the seller will be paying them and you all agree to take a trip to Cancun with the extra money.

Conversely, this seller could have a working relationship with one special lender he has a history with that will afford him many discounts and as a result, he agrees to assume the closing costs - knowing they will be reasonable.

If I am required to pay all closing costs in the confines of a purchase agreement, I surely will specify who I'll be dealing with to quantify the expenses or else, there will be a pre-determined limit to the expenditures I'll assume within the confines of that agreement.
 

·
Registered
Joined
·
461 Posts
The key here is you asked them to pay closing costs, they have a right to pick the lender that will be charging those costs. Case in point:
Let's say your brother owns his own mortgage company and plans to charge a couple points above par for originating the loan since the seller will be paying them and you all agree to take a trip to Cancun with the extra money.

Conversely, this seller could have a working relationship with one special lender he has a history with that will afford him many discounts and as a result, he agrees to assume the closing costs - knowing they will be reasonable.

If I am required to pay all closing costs in the confines of a purchase agreement, I surely will specify who I'll be dealing with to quantify the expenses or else, there will be a pre-determined limit to the expenditures I'll assume within the confines of that agreement.
Regardless of closing costs, there are laws involved. The seller can not MAKE someone use a specific lender.
 

·
Registered
Joined
·
81 Posts
Discussion Starter · #14 ·
They agreed to pay a certain dollar amount of closing costs, my good faith falls well below what they agreed to pay. Why would they care who they pay it to unless they have something to gain. Who's to say their lender wouldn't charge the full amount they agreed to pay, leaving me nothing to buy down the rate. This is just an example, but it seems they would be violating some laws if they deny my offer based on not using their lender.
 

·
Registered
Joined
·
1,158 Posts
Find out the investment group who owns it is and run them against the BBB. My guess is that they are trying to get kick backs from the lender.

Eitherway that's BS.

I paid all closing costs myself when I bought my place just to make a clean and easy offer. If I were to ask for closing costs I would ask for 3% towards closing costs. Whether my broker and I go to Cancun or not... That's up to us and not the seller. If they don't want to accept the offer they don't have too.

I would think that in this market people would take whatever they can get.
 

·
Full Of It.
Joined
·
780 Posts
I believe that's a violation of RESPA for the seller to dictate the title insurance providers. But I'm not sure about dictating the lender.

Just ask them why they care, They get paid and are gone, but you are the ones stuck with the lender for the next 15 to 30 years.....
 
1 - 17 of 17 Posts
This is an older thread, you may not receive a response, and could be reviving an old thread. Please consider creating a new thread.
Top