Can a seller force you to use their lender?
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Can a seller force you to use their lender?
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, 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. However, I understand how stressful the offer process has become. Today, buyers often face offer deadlines, lengthy instructions, and limited showing opportunities. Keep in mind that the listing agent likely recommended this requirement to the seller. In addition, many listing agents have specific rules for submitting offers. Because competition for homes remains strong, I recommend cooperating whenever possible. After all, you want your offer to stand out.
A real estate transaction involves many important professionals. Unfortunately, an inexperienced lender can create problems for both the buyer and seller. As a result, some listing agents advise sellers to require buyers to submit a second loan application with the seller’s preferred lender. Even so, they cannot require you to close with that lender. In many cases, sellers request a second application when the buyer has a low down payment or when another legitimate concern exists.
Instead, consider offering alternatives. For example, rather than allowing another lender to pull your credit, provide a copy of your credit report to the seller’s lender. Likewise, instead of submitting all of your income documentation again, ask your lender to contact the seller’s lender directly. Your lender can confirm that they have reviewed and verified your income, credit, assets, and down payment funds. Finally, whenever you email confidential documents, always black out your Social Security number and account numbers before sending them.
Best of luck to you on your home search!
Related Post: Are preapprovals that important?
