Realtor/Lender Ethical Breach? (agent, sale, housing, price)
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
We made an offer on a house. Full price, 20% down, conventional loan. Not our first home purchase or sale. House had been on the market about a month with no other offers.There was also a death in the house that the seller's realtor actively lied about and did not disclose until confronted with evidence. It was a natural death, but this raised the first red flag.
My usual lender is on vacation so I called a lender that we met at the open house just to get a preapproval. We were going to shop our rate around and see what was best, but we needed something fast. This lender reportedly had a "golden" relationship with the realtor and our agent thought it would be good for the offer to work with him.
The lender wrote the preapproval letter. The offer could have been in my name alone as I had sufficient assets to borrow and do the down payment, or we could have included my fiancee too who makes about a third of my income but has no debt and great credit. The lender first advised that it be in my name alone, then backtracked and said we should both be on the loan. Either way was fine.
After we made the offer, the lender (by his own admission) called the seller's agent and said that the "offer was 100% but there is one issue that won't be a problem." He then proceeded to disclose information about an extremely minor issue that I had alerted him to to the seller's agent. The lender admitted to me that he made this call.
I was horrified. I called my usual lender on her vacation and sent her all the info he had pulled. She freaked out and said that this is an ethical breach and that she would be glad to write her own letter.
The lender called me multiple times and tried to get me to gift the downpayment to my fiancee and put him on the loan by himself as that will give me the "inside track" with the offer and "make the seller the most comfortable". I told my other lender who looked at my fiancee's info to see if that made sense and she said that it was idiotic, that there was absolutely nothing wrong with my credit and my assets are "rockstar level." It was very odd that the lender would request this.
Meanwhile, the seller's agent refused to present our offer to the seller, stalling and stonewalling our agent as she was so freaked about the "issue." She made up a story that there was another "showing to very interested people" in a few days and that the seller wanted to "wait for that." We told our agent to withdraw as we were uncomfortable with this bias the seller's agent seemed to have for our offer and that we were not interested in playing games-- there are several other properties we are considering so we will just move on.
The seller's agent instantly backtracked, presented the offer in an hour and said that the seller was going to talk to her family the next day and would return with a response. No mention of these other showings. The seller's agent also had a "rule" that no one could contact her after 7pm, but broke this to present the offer to the seller at 8:30 pm.
We don't live in a market (we are in rural Maryland-- not near DC) where there are typically multiple offers and bidding wars for properties. The price of this place is well below what I am approved to borrow.
Any insights as to what might be happening here? I feel this is a true ethical breach on the lender's part and the seller's agent. What advice would you give?
You need to take your complaint "up the line" from the agent level to their BROKER's.
Both the sellers agent and your buyers agent work for/under a broker.
You need to take your complaint "up the line" from the agent level to their BROKER's.
Both the sellers agent and your buyers agent work for/under a broker.
Meanwhile... continue on with YOUR lender.
I agree. We still have not heard back yet on the offer and I have not officially fired the lender. I was waiting to hear something or withdraw before we do.
Do you think I should complain now or wait for a response? Is this house a loss?
How well do you like the house? Other than this, is it a good fit for you? If so, wait to see what happens. If not, start complaining now. I would go to the seller's broker now at any rate, to forestall any other shenanigans. If you really want to back out, go ahead and do it now. No need to wait for the seller. Then complain about the other lender to the appropriate governing organization.
How well do you like the house? Other than this, is it a good fit for you? If so, wait to see what happens. If not, start complaining now. I would go to the seller's broker now at any rate, to forestall any other shenanigans. If you really want to back out, go ahead and do it now. No need to wait for the seller. Then complain about the other lender to the appropriate governing organization.
I do like the house, certainly enough to make an offer, but it won't be the end of the world if we don't get it. I just have no idea what the motive behind all of this would be. We made a very strong offer. In our market, 20% down is rare.
Lender speaking out of turn to bias the realtor against our offer. The information he told us he shared was not appropriate to share with a seller's agent. The lender works for us-- not the realtor. The lender then gave terrible advice to get a male on the loan instead of a better qualified female. We have no idea why. We have had three other lenders review our application and credit now-- all agree that it is very very weird.
Realtor refusing to present the offer to the seller.
We learned today that the seller's agent did not even tell her there was an offer on her place until 7:30 pm when we threatened to withdraw. She assured our agent she sent it over as soon as she got it around 8 in the morning.
Lender speaking out of turn to bias the realtor against our offer. The information he told us he shared was not appropriate to share with a seller's agent. The lender works for us-- not the realtor. The lender then gave terrible advice to get a male on the loan instead of a better qualified female. We have no idea why. We have had three other lenders review our application and credit now-- all agree that it is very very weird.
Realtor refusing to present the offer to the seller.
We learned today that the seller's agent did not even tell her there was an offer on her place until 7:30 pm when we threatened to withdraw. She assured our agent she sent it over as soon as she got it around 8 in the morning.
You stated the "minor issue" was enough to "freak out" the seller's agent? Doesn't compute.
The seller's agent is required to disclose material issues regarding your financing that they come across. Even "minor" issues.
Your agent is required to disclose material issues that may affect your ability to close a deal. Even "minor" issues.
The "refusing to present an offer" thing is kind of an overblown myth regarding agents.. - sellers can absolutely make "rules" for their agents regarding the presentation of offers, and it's none of your business as a buyer. On a recent sale of my parent's home, I legally "had" to present a lowball offer- I presented the offer & told my Dad I could toss any future offers below $xxx in the trash without bothering him if he sent me an email directing me (his agent) to do so. He also directed me to trash any future offers (even "reasonable" offers) from that buyer, since he believed the buyer was playing games & he wanted to sell the house, not play games. The potential buyer isn't a "party" to the listing agreement, so even if they think an agent "has to" do something, the agent doesn't necessarily "have to" do so.
You're correct that the default status of the law is "present all offers, and do it quickly", but that isn't always the case.
You stated the "minor issue" was enough to "freak out" the seller's agent? Doesn't compute.
The seller's agent is required to disclose material issues regarding your financing that they come across. Even "minor" issues.
Your agent is required to disclose material issues that may affect your ability to close a deal. Even "minor" issues.
The "refusing to present an offer" thing is kind of an overblown myth regarding agents.. - sellers can absolutely make "rules" for their agents regarding the presentation of offers, and it's none of your business as a buyer. On a recent sale of my parent's home, I legally "had" to present a lowball offer- I presented the offer & told my Dad I could toss any future offers below $xxx in the trash without bothering him if he sent me an email directing me (his agent) to do so. He also directed me to trash any future offers (even "reasonable" offers) from that buyer, since he believed the buyer was playing games & he wanted to sell the house, not play games. The potential buyer isn't a "party" to the listing agreement, so even if they think an agent "has to" do something, the agent doesn't necessarily "have to" do so.
You're correct that the default status of the law is "present all offers, and do it quickly", but that isn't always the case.
The minor issue had nothing to do with the loan, which is the lender's one and only job during the sale. This is something personal that the lender overthought after I disclosed it and made a big gossipy assumption about it to his "friend" the seller's agent. I have consulted with a real estate attorney at this point who let me know that the lender's behavior is indeed grounds for getting this individual in big trouble, and could even be seen as discriminatory and violating fair housing.
Have you ever had a seller tell you to throw away an offer of asking price with 20% down from qualified individuals? If I was a seller and got one whiff that such an offer was withheld after I had had nothing with my house sitting on the market for a significant period of time, I would be fit to be tied.
First off, why put a full price offer in if the house had no other offers, especially with there being a death in the house as that would turn off a lot of buyers?
I personally would call the sellers managing broker and also the lenders manager. This is extremely unethical on both parties and could lead to both of them losing their professional licenses! If you really want the home, then I would demand that you only deal with the managing broker and your actual lender, otherwise move on and find another home.
Getting your real estate attorney was smart! I'd also file a complaint against both the realtor and the lender!
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
