Seller Requirement to use their finance company

Mike, great question, I've personally seen this more than I'd care to while working for buyers. I cannot speak to the actual legality of it, however I have not seen anybody get in trouble for it. They are not requiring that you use their lender of choice, only that you prove your credit/financial worthiness by getting pre-approved with their lender. I have not followed this "requirement" for ANY of my buyer's transactions in which we came across this scenario, and have still secured contracts. I suppose you could potentially come across agents or sellers that are sticklers for this requirement in which case you would just need a Realtor on your side that is an absolute problem solver! Hope this helps, thanks for posting!

Hi Mike, A lot of agents and Sellers are skeptical and request you speak to their lender as a second opinion. There is no obligation to use that particular lender, as you are free to use whomever you choose. A good Realtor will a lot of times negotiate you out of this requirement. Kelly Jackson REMAX Southwest 281-652-6873

Good morning Mike, you have the option of using whatever finance company you want. The seller is not technically asking you to use their preferred finance company though. They just want you to get a pre-qualified letter not a pre-approval letter from that particular lender. When a lender pre-qualifies someone for a loan, they are just going by the statements you give them about your income and assets. To issue a pre-approval, the lender actually have to verify everything which is why a pre-qualification letter really isn't worth anything. If the numbers work for you on the home as an investment, go ahead and obtain the pre-qualified letter and let the listing agent know that you will ultimately use your own lender to finance the home. Hope this helps, Cassandra Vickers, RE/MAX Prestige, 832-298-9062

No you do not have to use their lender. While the builder can require that you be qualified by his preferred lender, you are free to borrow from whomever you please. The builder wants to avoid investing significant marketing dollars in finding a buyer, who then leaves him at the altar because his loan doesn’t come through. This won’t happen with his in-house lender because of some prior arrangement with the builder. While the arrangement can take many forms, the thrust of it is that in the event that a loan to a buyer can be closed only at a loss, the loan will nonetheless be made, since the profit margin on the house will more than cover it. For example, if the buyer turns out to have previously undisclosed credit problems that make him unacceptable except at sub-prime loan terms, the in-house lender will make the loan and sell it at a loss. To make up for these losses, other buyers are over-charged. Since the builder cannot require buyers to use the in-house lender, he encourages them to do so by offering concessions that he hopes buyers will value by more than the over-charge. For example, if the loan over-charge is $2500, the builder might offer kitchen cabinets with a retail price of $3,000, but which only cost the builder $1,500. It seems like they want to use their lender however if you use your own that just want to make sure it's money in the bank. I would call your lender and have him call the listing so he can guarantee your good to go. Most pre-qual letter say valid for 60 days at the bottom, your lender should be able to send one in a few hrs if yours is outdated. If all your finances are the same.