Can a seller force you to use their lender?
Ask Phyllis: a blog series of frequently asked real estate questions. Email us here
Dear Phyllis,
We have been looking at homes for several months and have already made three offers. Two of these required preapproval by the seller’s lender. A nationwide bank already approved us so I really do not see any reason for this. With our offer we submitted proof of funds and a preapproval letter with our FICO score. I am concerned about identity theft, therefore I am not comfortable submitting my personal information to additional lenders almost every time I make an offer. I don’t want my credit checked multiple times either. Can a seller force you to use their lender?
Jim
Dear Jim,
A seller cannot force you to close with their lender. I understand how stressful the offer process has become. There are often offer deadlines, endless offer instructions and limited showing times. Keep in mind the listing agent likely recommended this step to the seller. Some listing agents have a set of rules when submitting offers. With so much competition for homes, I recommend that you cooperate as much as possible. You want to be the buyer with the accepted offer.
There are many critical participants in a real estate transaction and an inexperienced lender can create havoc for both buyer and seller. I have seen instances where the listing agent has advised the seller to insist that the buyer double app (application) with their choice of lender. However, they can’t require you to close with their lender. Double apps are sometimes required when the buyer’s down payment is low or there is some legitimate concern.
So perhaps instead of each new lender pulling credit, you can show a copy of your credit report to the seller’s lender. And rather than providing all your income information, have your lender contact the seller’s lender. They can advise them that your income, credit, and down payment information has been reviewed and verified.
Anytime you are emailing confidential information, be sure to strike out your social security number and account numbers.
Best of luck to you on your home search!
Related Post: Are preapprovals that important?
