Special offer
Mike Kelly,CRS,CIPS, "One of Sonoma County's Natural Resources" (The MJKelly Team)

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Roy Kelley
Retired - Gaithersburg, MD

This would violate the rules of the real estate commission in our state.

Jun 27, 2017 04:48 PM
Ron and Alexandra Seigel
Napa Consultants - Carpinteria, CA
Luxury Real Estate Branding, Marketing & Strategy


An agent cannot dictate who the lender should be.  I don't think that this is within our power!  Perhaps, your broker should have a friendly chat with their broker?

Jun 27, 2017 04:04 PM
Teri Pacitto
Compass - Westlake Village, CA
Real Estate, Your Style...Your Home...My Specialty

I'm seeing it more and it turns off buyers.  They'd rather move along to another home than be dictated to by an agent who is probably doing something that the seller doesn't even know about. 

My buyers are pre-approved with very qualified lenders and if they want the lender to discuss that may be fine, but my clients want to go through the process with a lender that they don't know and trust.

Jun 27, 2017 08:40 PM
Fred Griffin Florida Real Estate
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

     Potential RESPA violation.  They could also find themselves up the proverbial creek with the Florida Real Estate Commission.

Jun 27, 2017 05:24 PM
Wayne Martin
Wayne M Martin - Oswego, IL
Real Estate Broker - Retired

Sounds like someone should review RESPA section 8! They and their broker may have a problem

Jun 27, 2017 05:12 PM
Lyn Sims
Schaumburg, IL
Real Estate Broker Retired

You either do it or they will not present your offer. I would call their broker & start a stink. 

Do I think it's a conflict of interest - you bet. Should it be illegal due to privacy laws - you bet.

Jun 27, 2017 05:01 PM
Bob Crane
Woodland Management Service / Woodland Real Estate, KW Diversified - Stevens Point, WI
Forestland Experts! 715-204-9671

Maybe they are just fearful of people showing up with pre approvals from questionable lenders, many have been burned by some of those online lenders that take forever and never quite perform.

Jun 27, 2017 04:30 PM
Thomas J. Nelson, REALTOR ® e-Pro CRS RCS-D Vets
Big Block Realty 858.232.8722 - La Jolla, CA
CEO of Vision Drive Realty - Coastal San Diego

This is been a common practice since 2008 or so, when too many bogus buyers were showing up: quite frankly I don't trust some of the agents to turn it off first because of how bad the offers look.
Fair warning is given in the MLS though, so if you don't like the concept, don't show the house, because if you write the offer you're still going to be subject to it, like it or not.
But the good news is you don't really have to deal with it you just tell your lender to talk to their lender that's how I handle it with Jason Gordon, my AR lender.

Jun 27, 2017 10:28 PM
William Feela
Realtor, Whispering Pines Realty 651-674-5999 No.

I have had this happen before also,  I give my clients an option  and most tell them to go jump.  Deal with the offer and their financing as it is.

Jun 27, 2017 07:37 PM
Debe Maxwell, CRS
Savvy + Company (704) 491-3310 - Charlotte, NC

Oh, agent is breaking all kinds of rules here and I would definitely have my broker have a chat with the agent's broker, Mike Kelly.

Certainly the seller can request a 'second' pre-approval with their preferred lender but, only to be sure the deal doesn't go south. However, if your buyer doesn't want to get a second pre-approval, that agent STILL has to present that Offer. 

Jun 27, 2017 07:37 PM
Dorie Dillard Austin TX
Coldwell Banker Realty ~ 512.750.6899 - Austin, TX
NW Austin ~ Canyon Creek and Spicewood/Balcones

I definitely think it is time for your broker to talk to their broker.

Jun 27, 2017 07:05 PM
Hella M. Rothwell, Broker/Realtor®
Carmel by the Sea, CA
Rothwell Realty Inc. CA#01968433 Carmel-by-the-Sea

They can do it, but they can't dictate who the buyer then actually uses as their lender.

Jun 27, 2017 06:04 PM
Anna "Banana" Kruchten
HomeSmart Real Estate - Phoenix, AZ

Mike we used to see this all the time back in the reo days but I haven't seen in a very long time.

Jun 27, 2017 05:03 PM
Eve Alexander
Buyers Broker of Florida - Tampa, FL
Exclusively Representing ONLY Tampa Home Buyers

Over my dead body...why would anyone representing  a buyer allow some listing agents lender to scrutinize how much money their client has?

This was discussed may times, and legal said that the LA is overstepping into the BA relationship and violation of RESPA.

I simply refuse, and submit solid PQ...and I do not get challanged and yes my offer does get presented.


Jun 28, 2017 04:12 AM
Anthony Acosta - ALLATLANTAcondos.com
Harry Norman, REALTORS® - Atlanta, GA
Associate Broker


Jun 27, 2017 09:02 PM
Scott Thompson
Columbia Mortgage Plus - Blue Springs, MO
Commerical Finance - Blue Springs, MO

Speculate all day but it could be an ownership issue as well.

CO-branding.  If the mortgage broker is paying for the leads .... and/or one owns the other.

Bank of America did this with thier REO inventory, you may remember.

Because absolutely convoluted title issue's.  Title company's would not even underwrite their files. 

Make it a Great Day.

Jun 27, 2017 08:34 PM
Jeff Pearl
RE/MAX Distinctive / LIC in VA - Lovettsville, VA
Full Service Full Time Realtor

That's common with bank owned properties, but even if their lender approves you, they tell you that you can still use another lender. The agent could be following instructions from the seller, but doubtful. If the buyer really likes the house, i would just do the pre-approval with their lender, but i would tell the loan officer that buyer has no intention of switching lenders, and see how loan officer reacts. If you're worried about agent not presenting your offer, send a copy of your offer to agents broker.

Jun 27, 2017 06:03 PM
Debbie Reynolds, C21 Platinum Properties
Platinum Properties- (931)771-9070 - Clarksville, TN
The Dedicated Clarksville TN Realtor-(931)320-6730

They have been doing this a long time and part of it is to see if the buyer is strong (not get a letter from a lender that isn't worth anything) and the other is to win the business. The only way to avoid it is to have a cash buyer.

Jun 27, 2017 05:55 PM
Jill Murty, Realtor - Orange County, CA
Movoto - Laguna Niguel, CA

Listing agents frequently require that the buyer get cross approved with the listing side's trusted lender.  It is simply to confirm the buyer is qualified to purchase the property.

I have the buyer's lender contact the listing side's lender to go over the information so the buyers don't have to be inconvenienced.

The listing side is most concerned with the buyer's qualifications to purchase the property.  Cross qualification isn't a scheme to get the buyer to switch lenders. 

Jun 27, 2017 05:31 PM
Barbara Todaro
RE/MAX Executive Realty - Happily Retired - Franklin, MA
Previously Affiliated with The Todaro Team

if a buyer is financed through BoA, as an example, most of the agents in my town will ask that the buyer make application at another institution, too.... I don't see an issue with it.... 

Jun 27, 2017 05:04 PM
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

He who has the gold rules....

Jun 27, 2017 04:44 PM
Joe Pryor
The Virtual Real Estate Team - Oklahoma City, OK
REALTOR® - Oklahoma Investment Properties

I don't blame them with the number of contracts falling out and the general lowering of standards with so many agents out there. The point is have the buyer go through a vetting process before you put a seller in jeopardy by a busted contract.

Jun 27, 2017 04:18 PM
Lynnea Miller
Bend Premier Real Estate - Bend, OR
Premier Real Estate Service in Central Oregon

It could be the agent has been burned in the past by lenders that have not performed and wants someone he/she trusts to provide the pre-approval.  However, in our market, we know the lenders who work well and always suggest our buyers get pre-approved with them.  In a hot market, with multiple offers, the knowledge the listing agent has on the results of a particular lender can make the difference on whether or not that is the offer accepted by the seller.

Jun 27, 2017 04:14 PM
Jeff Dowler, CRS
eXp Realty of California, Inc. - Carlsbad, CA
The Southern California Relocation Dude

We see requests for being cross-qualified on a fairly regular basis. See what Jill Murty, Realtor - Orange County, CA  says, too.

Jun 27, 2017 09:02 PM
Sam Shueh
(408) 425-1601 - San Jose, CA
mba, cdpe, reopro, pe

Regular sale- This agent having a loan friend trying to get more business. May be it is his brother-in-law.  But a second opinion loan officer may be good as we have unreliable loan agents that I like not to use them.

Jun 27, 2017 03:48 PM
Abby Stiller
SW Florida (239) 284-8637

Totally agree with Fred Griffin So glad we don't have that many foreclosures in our area anymore.

Jun 28, 2017 01:38 PM
Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

I suppose a seller can ask for anything. A pre-approval for purposes of an offer is only a pre-approval. There is no obligation to use that lender for a loan. And the listing agent is still obliged to submit any offer in writing with or without their agent's lender's pre-approval.

Jun 28, 2017 04:00 AM
Anna Hatridge
R Gilliam Real Estate LLC - Farmington, MO
Missouri Realtor with R Gilliam Real Estate LLC

As an REO listing agent I can tell you some REO sellers will not look at any offer presented without the required Pre-approval.  I can send it but they simple reject it as an incomplete contract packet.  If the buyer is a serious  cash buyer they will already have a proof of funds letter from their bank.

Jun 28, 2017 01:32 AM
Praful Thakkar
LAER Realty Partners - Burlington, MA
Metro Boston Homes For Sale

Mike Kelly - I am not in favor of this for sure.

Jun 27, 2017 10:55 PM
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Wow, this would be a violation around here.

Jun 30, 2017 10:55 AM
Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

Do not see it that much anymore.

Jun 29, 2017 08:49 PM
Kasey & John Boles
Jon Gosche Real Estate, LLC - BoiseMeridianRealEstate.com - Boise, ID
Boise & Meridian, ID Ada/Canyon/Gem/Boise Counties

We saw this start to happen because banks were doing it too. Builders and REO. We have one agent who doesn't specifically say a buyer has to get approved through her preferred lender, but in the offer instructions she states something like "Seller requests: Preference will be given to cash, local lenders, credit unions" Basically meaning no national banks or online lenders please, and anybody that knows her knows which lenders she prefers. -Kasey

Jun 29, 2017 08:15 AM
Nathan Gesner
American West Realty and Management - Cody, WY
Broker / Property Manager

It doesn't sound legal or ethical to me. 

Jun 29, 2017 06:20 AM
Mike Kelly,CRS,CIPS
The MJKelly Team - Santa Rosa, CA
"One of Sonoma County's Natural Resources"

Wow! Thanks for the many and varied answers and replys. This is one agent, NOT a big bank or REO comapny, making the request. We haven't asked for this in our area in years as we have NO REO market to speak of. In our very hot market my question centers on the "WHY". I emailed the listing agent and she never replied to me as to the "WHY". Plus this is a super competitive market and my questions centered on what if we Don't get pre-qualified with their lender? Is the offer NOT presented to the seller?

Jun 28, 2017 01:52 PM
Andy Madrid
Hawaii Coast Realty, LLC - Kailua-Kona, HI
Expertise, Professionalism, and Service

I straddle the county between Santa Barbara (where it's hardly ever used) and Ventura County (where I see it all the time).  I don't like it and if I have qualified buyers for a property all I ask them for is their pre-approval letter from the lender of their choice.  But all of your concerns you raised are valid.  It's not the seller that is dictating these terms, it's the agent and it really chaps my hide.  I tell buyers what the agent is asking for and in all cases, they mark it off their list.  They dont want to be told what to do.

I see it as a violation but not everyone does and the MLS's are not enforcing it.


Jun 28, 2017 01:30 PM
Caroline Gerardo
Licensed in 20 states - Newport Beach, CA
C. G. Barbeau the Loan Lady nmls 324982

 Several sides to this- I saw a "preapproval letter" this morning from an agency who is not licensed lender. They act as a kind of sort of broker. I'll write a post about it and put the letter up later today. The letter has zero value, and any seller would pass.


Would you accept on your seller's behalf a prequal or preapproval letter from a. an unknown lender or b. a lender you Know can't close on time or c. lender who isn't communicative? No, you'll take the cash deal or the for sure deal. Cross qualifying is not illegal.  Listing agent can't require it legally but if buyers want this home, in our crazy tight markets they can choose to cooperate.

I cross qualify for agents I work with NOT to steal the loan, but see if there is a real deal that can close.   Skill set of a NMLS license carrier  varies from numb-skull to fabulous. Any mortgage originator can increase income or assets in the computer to make DU or LP approve eligible. An Underwriter will correct this.  Therefore having someone honestly review ALL the ins and outs is different from someone who runs credit and says "looks good."  

Here is what I suggest: have your buyers contact the lender- tell lender in writing they are NOT allowed to re-pull credit but lender who wrote the pre-approval can give the full credit report, plus income taxes, w-2's pay stubs and bank assets. Seller's lender can tell listing agent "This is a thumbs up or down." 

Jun 28, 2017 11:39 AM
Ryan Huggins - Thousand Oaks, CA
https://HugginsHomes.com - Thousand Oaks, CA
Residential Real Estate and Investment Properties

It's been a common thing out here for a long time.  It's also a CFPB violation if there is any cost or obligation to do use their lender.  This was a ruling about a month or two ago.

Jun 28, 2017 09:58 AM
Kathleen Daniels, Probate & Trust Specialist
KD Realty - 408.972.1822 - San Jose, CA
Probate Real Estate Services

Very. Common. Practice. In. My. Area. Buyers can use whatever lender they want. Many lenders are at open houses with the agent ... literally demanding that buyers provide their contact information and get pre-approved.

Jun 28, 2017 07:13 AM
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

Good luck.

Jun 28, 2017 07:06 AM
Michael Setunsky
Woodbridge, VA
Your Commercial Real Estate Link to Northern VA

Mike Kelly The buyer should not be obligated to use their lender and can use a lender of their choice.

Jun 28, 2017 06:37 AM
Beth Atalay
Cam Realty and Property Management - Clermont, FL
Cam Realty of Clermont FL

I see this on occasion, I've yet to have a buyer who agreed to comply with their request. If they wish to put an offer, I include their pre-approval from the lender buyers chose but always contact the listing agent prior to submitting the offer. I don't agree with it whether it's an REO property or otherwise.

Jun 28, 2017 06:34 AM
Tony and Suzanne Marriott, Associate Brokers
Serving the Greater Phoenix and Scottsdale Metropolitan Area - Scottsdale, AZ
Coldwell Banker Realty

Anna Banana Kruchten, CRS nailed this one!

Jun 28, 2017 06:14 AM
Michael Jacobs
Pasadena, CA
Pasadena And Southern California 818.516.4393

I see this on occasion in the agent only remarks in the mls.  As far as intent - the reasons can vary.   It may be control issues from the listing agent, seller preference or weeding out questionable mortgage pre-qualification letters.  

If I have an interested buyer, I contact the listing agent and ask questions - they can ask, the buyer does not need to comply.  Based on the results of that conversation, I share with the buyer and then  they decide to proceed or continuing searching. 

Jun 28, 2017 05:45 AM
Harry F. D'Elia III
WEDO Real Estate and Beyond, LLC - Phoenix, AZ
Investor , Mentor, GRI, Radio, CIPS, REOs, ABR

talk to the broker

Jun 28, 2017 05:44 AM
Sandy Padula & Norm Padula, JD, GRI
HomeSmart Realty West & Florida Realty Investments - , CA
Presence, Persistence & Perseverance

If an agent does that, then the seller must agree. It is a PITA, no question.

Jun 28, 2017 05:27 AM
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

They can ask.  And, you can say no.

Jun 28, 2017 05:03 AM
Scott Godzyk
Godzyk Real Estate Services - Manchester, NH
One of the Manchester NH's area Leading Agents

This is nothing new in REO, i have 2 banks i list for that make it a must to have any buyer get a mortgage pre qual with their mortgage dept before they will look at their offer. It is a added step for a buyer, they can use anyone they want but do get incenteives for using them 

Jun 28, 2017 04:29 AM