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Realtor's Fault?

Question:   Our buyer’s loan was just denied 2 weeks before the scheduled closing date. We are furious with our agent for allowing this to happen. Any suggestions for dealing with the next buyer who wants to buy our home?

Answer:  We understand that It is extremely upsetting when you hear your buyer’s loan has been denied. You feel the logical person to blame is your Realtor. Keep in mind that the Realtors job is to find a buyer and sell your home. It is not their job to get the buyers loan approved; That is the job of the Lender.

We have sold over 1200 homes in our career and we have found that it is rarely the fault of the Realtor. The only instance where the Realtor can be of blame is if he/she did not obtain a letter of preapproval from the lender stating that the buyer is qualified to purchase your home at the agreed selling price.

When your agent goes over the contract on your home, they will explain the terms of the offer and the preapproval from the buyer’s lender. Common sense would dictate that the loan officer has sufficiently checked out the buyer in order to receive the preapproval. But, among the vast number of highly qualified loan officers, there are some that are inexperienced, overly optimistic or some that just don’t know what they are doing.

Here is some advice that may help you: When we receive a preapproval, we give our seller all the facts about the lender & buyers finances that we can obtain without violating the sacred buyer “privacy laws”. We say this with some sarcasm, because these privacy laws are there to protect the buyer, but there is no concern for the seller who is also part of this transaction. We ask the loan officer about their experience. We ask that the buyer be put through the lenders auto underwriting system.  Since it is the underwriters who give the final approval to the buyer’s loan, we feel the automated version of this adds to the validity of the preapproval letter.

We also want to know if the buyer has chosen their Realtors preferred lender. This preferred lender has been used by the Realtor in the past and has proven to be competent because of their previous success rate.

All the above increases the odds that your buyer will receive a loan approval and a clear to close on your home.

Remember that nothing is ever 100% perfect. This is why an experienced Realtor who tells you like it is, is much better than a Real estate agent who tells you what you want to hear!

Words for Thought

"In Life, it's Important to Know 

When to stop Arguing with People 

& Simply Let Them be Wrong."

"I Fear the day that Technology will surpass

our Human interaction.

The World, will then, have a Generation of Idiots."

(Albert Einstein)

"Complaining about a problem 

without posing a solution

is Called Whining."

(Teddy Roosevelt)

Should a Seller be able to get Credit Information on a potential buyer?

Question: My Realtor placed my offer on a house with a pre-approval and 20 percent down. The selling agent called my loan officer to ask for my FICO score, how much money I have in the bank and other personal questions so she can run the info with her seller. My loan officer did not give any info except that I am a really good, serious buyer with A+ credit. Was the listing agent out of bounds with such questions?

Answer: There's a complexity within your question that needs to be addressed.

The listing agent wants to assure that any would-be purchaser is financially qualified to buy the property. The reason is that the owner (and the agent) do not want the property tied up for weeks with a buyer who is ultimately unable to close. Such a delay might mean the loss of a qualified buyer. Also, there may be competing offers for the property so the owner will want to consider the financial strength of the bidders since it does no good to accept a high offer from someone who cannot complete the sale.

In the usual case the buyer's agent provides a financial qualification statement or a letter from a lender. Neither is an absolute guarantee of financing, but both are useful.

Even though this personal information is considered private, the seller of the transaction needs to know that their buyer has an excellent chance to close the deal. Sellers also have packing to do, movers to schedule, and a new home to buy. Remember, too many Real estate deals fall apart due to a poor prequalification of the buyer, or information the buyer failed to disclose to their lender at the time of prequalification.

What the lender told the listing Broker in your case, should be enough information for a seller to feel they have a well-qualified buyer. What the lender could also have said is that his judgment was based on your ability to put down 20 percent plus his review of your A+ credit report. In other words, the lender cannot reveal the contents of the credit report but he can at least say that his analysis is not based on fantasy.