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No--there is nothing suspect about it. The seller's agent's job is to protect the seller. The agent does not have a deal with the local lender.
What you are reading/hearing is the agent trying to protect his/her clients. He or she is doing just that by indicating their previous experiences with online lenders. The agent's experience with online lenders has not been great. There is a reason for that. It is the listing agent's job to advice his/her client of potential issues and try to prevent problems before they happen.
In terms of you expressing doubt, at least as I read it, about the back scratching that goes on between various parties in a transaction, think about that. You are talking about their jobs and their paychecks. How many people do you know that would act in an ethically challenged way regularly and risk their paychecks? Not many is my guess. The same holds true for agents and lenders. They are people just like you.
There are two kinds of honest people. The kind who look at the world like a mirror and expect people to be like them, and the kind who look at the real world.
Are some people honest? Of course!
Are at least 50% of people basically honest? I sure hope so!
Do most people follow a strict ethical code that stops them from taking advantage of business situations that can put a few dollars in their pockets or help friends & family while not harming anyone? I vote no.
If you are an honest real estate agent and your brother-in-law is an honest mortgage broker, are you going to recommend your clients go through him? Of course you are. That's networking. And you hope he would do the same for you.
If you are a DISHONEST real estate agent, would you do the same thing? Again the answer is yes. Just for different reasons, with a different outcome.
Last edited by rugrats2001; 06-20-2015 at 11:29 AM..
"5) They seller's realtor is using an example with the previous offer, where the co-signer backed out (had nothing to do with the lender) against my choice to shop around."
OP, I read that to mean the sellers have had to go through the pain of a deal going down the toilet, and are trying to avoid it happening again. They aren't saying the 1st one had anything to do with online funding. They're just trying to be careful. As a seller who had a deal fall through on closing day, its devastating. I was extra diligent on who the next buyer was and the contract terms. Good luck and enjoy your new home.
Do most people follow a strict ethical code that stops them from taking advantage of business situations that can put a few dollars in their pockets or help friends & family while not harming anyone? I vote no.
If you are an honest real estate agent and your brother-in-law is an honest mortgage broker, are you going to recommend your clients go through him? Of course you are. That's networking. And you hope he would do the same for you. .
This is what I was trying to get at. Thanks for expressing it better than me.
The seller's realtor indicated in her email that she has worked with this particular local lender several times. I'm sure they have a tight knit working relationship. This partnership is advantageous for them, because they will send business in each other's direction. "I have a friend who can help..." That's not an uncommon phrase in any business.
So maybe it's not that they are "lining each other's pockets" per se, but they certainly do have an incentive to support one another's business. Like the poster I quoted said, that's networking.
"5) They seller's realtor is using an example with the previous offer, where the co-signer backed out (had nothing to do with the lender) against my choice to shop around."
OP, I read that to mean the sellers have had to go through the pain of a deal going down the toilet, and are trying to avoid it happening again. They aren't saying the 1st one had anything to do with online funding. They're just trying to be careful. As a seller who had a deal fall through on closing day, its devastating. I was extra diligent on who the next buyer was and the contract terms. Good luck and enjoy your new home.
I completely understand their concern about deals going thorugh, but they should not be dictating who I conduct business with, which is essentially what she was trying to do ("go with my local bud who I've been working with for years"). I should have the freedom to pick the lender that gives me the best rate and best closing cost figure, and that's what I did.
The lender I'm working with is a reputable, FDIC-insured financial institution that is saving me .25% on my rate and nearly $2k on my closing costs.
Oh I agree with you OP, you should use whoever you want. I was just pointing out #5 has nothing to do with your online lender choice. You sounded like you thought that was fishy, them even telling you about the deal that fell through.
My impression is that you are taking it the wrong way. They aren't trying to tell you who to use, they are cautioning you against using someone that may not come through for you. Also you aren't privy to all the offers. They may have selected you based on your using someone they know vs another offer because they had a bad experience with a deal falling through. Obviously your changing lenders raised a red flag in the sellers mind and the other realtor conveyed their concerns in a polite manner. Which was nice as you are a first time buyer you may not know the pitfalls and now you will be on top of the lending situation.
In my opinion you are doing the right thing by getting the best rate you can with the best terms. A quick caution though. I have bought several houses and always used a local lender. EACH time there were small differences in the rate or number of payments in the lenders favor. Make sure you know your numbers well. Have a cheat sheet in hand at closing to compare. Read through the closing documents. Yes they are long and wordy but on your first home you need to know how the mortgage works.
I have always requested them in advance. They never give them to me. I even ask for a blank non-filled in version. As a result everyone sits around the closing table while I read through them all. They tap their pens on the desk, drum their fingers, go get drinks etc. But I read everything I sign. You should to. Each time they had to go print a new copy to fix the errors that would have cost me money. They will put enormous pressure on you to try to get you to just sign where they tell you to. Don't fall under the pressure.
Last time I bought a car the document lady kept trying to point to the signature areas on the docs so I wouldn't read them. She kept trying to engage in small talk so I wouldn't read them. Finally I said to her "Would you rather I take these home so I can read them and come back tomorrow?" She finally shut up so I could read them.
I don't think it's suspect, meaning that it fraud. But I do think it's overreaching. The seller's agent has no business suggesting that they have the right to have input on who you get your loan through. And of course, they are only too happy to spend your money by suggesting that it's better for you to go through someone else with a higher interest rate and more closing costs.
I don't think it's suspect, meaning that it fraud. But I do think it's overreaching. The seller's agent has no business suggesting that they have the right to have input on who you get your loan through. And of course, they are only too happy to spend your money by suggesting that it's better for you to go through someone else with a higher interest rate and more closing costs.
Yeah, that's my point. The lender I chose has a rate of 4.50% compared to the 4.75% rate that the local guy had. Did I mention that his rate went up the day I actually sat down to talk about getting the loan processed? When I was working with him throughout the whole process, and getting figures for the monthly payments, the rate he was using was 4.625%. Then it went up to 4.850% the day I went talk to him about starting the loan on this condo. He was also charging me buydown points to get to the 4.75%, which equated to an additional $250 in closing costs. The lender I chose also charged about $2,000 less in closing costs.
My impression is that you are taking it the wrong way. They aren't trying to tell you who to use, they are cautioning you against using someone that may not come through for you. Also you aren't privy to all the offers. They may have selected you based on your using someone they know vs another offer because they had a bad experience with a deal falling through. Obviously your changing lenders raised a red flag in the sellers mind and the other realtor conveyed their concerns in a polite manner. Which was nice as you are a first time buyer you may not know the pitfalls and now you will be on top of the lending situation.
That's being prejudicial on their part. They have no reason to believe that my particular lender will not come through. They're discounting my lender before it even has a chance to fail.
There are a pretty good amount of online financial institutions that offer services. I have a savings account with HSBC, and it's strictly online, and I have no problems with them. My lender has been in business for 106 years, is FDIC-insured, and is a subsidiary of a prominent bank. I've done my research on it, and it has very good customer reviews on Zillow and Bankrate. I just think that they are overreacting and prejudging my lender based on a few bad apples. These places would not be in business or be as successful as they are if they were constantly failing on financing.
FWIW, the lender they suggested I work with isn't even financing my mortgage. More than likely, he is working with Quicken Loans, because they had the same exact rates and closing costs when I called them. So there really isn't a difference between my lender and their lender.
Its nice to have the seller's realtor looking out for you.
As with any financial transaction, read and understand everything carefully. If there are things at closing about which you are not absolutely sure, ask for explanation. Make sure your attorney is at the closing. If it takes four hours, it takes for hours. No one will step up and offer to back stop you on any errors in lieu of reading and understanding the documents, I am sure. If they start with the pencil tapping, just ask.....they will shut up quickly!
Given the close and professional relationship between the "local" lender and the seller's realtor, I am sure she can use her muscle to get a rate and points which match the competitor. Just have her sort out those little details and tell her you will consider comparing each deal again.
A line from Alice's Restaurant comes to mind: "You got a lot of damned gall..." Why in the world would you give too $hits about the seller's previous deal which fell apart, and their being "uncomfortable" with your choice of funding institutions? If it was important to them before they leaped at your offer, they should have put it in the contract.
Cut rate lenders are able to offer low rates for a reason. Keep an eye on everything to ensure that you get your deal done on time and at the original terms. It would be sad to see your purchase fall apart...but it is none of the seller's, nor their agent's, business (sure, they are anxious, but so what?) . And I hope it says so in your contract!
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