Has anyone had their realtor urge them to use their lender?

[Ryan Swigart]

I am relocating so I have a new realtor I have never used in the past. She has been very good so far. However, when I told her I wanted to submit the first offer, she called me and strongly urged me to use a local lender that they recommend instead of the lender that I have my pre approval and other properties through. She said since she is not familiar with that bank it will make the offer weaker.

I have never heard that before and don’t understand how that makes a difference. In my mind, money is money the seller would care and I’d lm very happy with my current bank, so why would I add in another lender, when I already have everything organize through one. Also, submitting a lengthy application to a new lender isn’t the most enjoyable thing to do.

Thanks for the feedback and I’m curious if anyone else has had a similar situation.

[Ryan Kelly]

@Ryan Swigart I would never state that someone was MY lender as that implies a commission, which we don’t earn. I don’t make any money from lenders if they work with my clients. However, I do have a list of preferred lenders I trust to get the job done with high levels of communication and experience. The big internet names like Ally, Better, and Quicken Loans often win buyers by advertising low rates, but they struggle while under contract with any roadblocks or underwriting challenges. The local mortgage brokers and lenders I recommend are amazing at problem solving, which is essentially the definition of underwriting.

[V.G Jason]

It sounds shady but there's a reason. Lots of sellers now are vetting the lenders as hard as the lenders are vetting the buyers. There's a real distrust.

I've had several sellers tell me they do not want to work with a lender I was using. I told them, they had no choice. Lost 1-2 deals that way. They weren't against that lender as much as they were preferring the other because they thought I was a wholesaler or someone trying to just get them under contract and play with them however that could happen. But there's a real and legitimate fear among sellers on quality lenders, they hate the idea of busting a deal cause a lender wouldn't get it done. It means financing contingencies are an issue and that does nothing but hurt the re-listing.

[Steve K.]

In my (very competitive) market, there’s a much better chance of getting your offer accepted using a well-respected local lender. I recommend my buyers use my lender that I use on my personal deals because he’s very well known around here, always closes on time as promised and is great to work with. Half the time the agent on the other side knows him personally, has done deals with him before or at least knows his reputation and it helps get the offer accepted. Meanwhile the big national lenders that over promise and under deliver are notorious and a smart listing agent will not accept an offer with them as the lender. They’re known to not close on time, or not close at all. I’ve had listing agents even counter an offer with their lender instead of mine before, and we switched lenders to get the deal. Your agent is probably looking out for your best interest here. If they’re getting a kickback for referring their lender, that would be highly illegal, anyone suspecting that is the case here on these forums is frankly out in left field, I don’t believe that really happens unless working with someone really sketchy or clueless. It wouldn’t be worth the risk to lose your license and get fined for a few hundred bucks or whatever the referral is, that’s ridiculous. 

[Carlos Ptriawan]

Just take a look at the debacle of Silicon Valley Bank. What's the difference between SVB and Bank of America  ? money is not just money.
All lender has their own unique guideline and characteristic that are not "written".

It comes from experience, what lender would work for the buyer, seller, and particular house location.

There're a few lenders out there that use the latest technology, and there're also a few that still use manual data input and not using DocuSign yet LOL

[Eliott Elias]

Quote from @Jay Hinrichs:

Quote from @Russell Brazil:

Quote from @Eliott Elias:

Many realtors make commissions on each loan they refer to the lender. Money is money, as long as your realtor vets your lender there should be no reason to change. 

This is 100% false and illegal.

unfortunately for this member he is often very wrong with his posts.. this is just a prime example. Not only incorrect but Illegal activity I wonder if he is an agent ..

 It is 100% illegal to do this. It is unfortunately the case with a lot of realtors and lenders, I was merely providing a reason as to why the realtor may have been pushing the client to go with their lender. 

[Eliott Elias]

Quote from @Michael Brattelli:

@Eliott Elias realtors don’t make commissions on referring to lenders, that’s a kickback and is illegal.

 I agree, it is illegal. It does not mean it does not happen. 

[Steve K.]

Quote from @Eliott Elias:

Quote from @Jay Hinrichs:

Quote from @Russell Brazil:

Quote from @Eliott Elias:

Many realtors make commissions on each loan they refer to the lender. Money is money, as long as your realtor vets your lender there should be no reason to change. 

This is 100% false and illegal.

unfortunately for this member he is often very wrong with his posts.. this is just a prime example. Not only incorrect but Illegal activity I wonder if he is an agent ..

 It is 100% illegal to do this. It is unfortunately the case with a lot of realtors and lenders, I was merely providing a reason as to why the realtor may have been pushing the client to go with their lender. 

Really? A lot of lenders and Realtors do this? Simply not true in my experience, I’ve never heard of it even once and I don’t know any agents or lenders that would be that dumb. Frankly your comment is a reckless statement to make. Maybe prior to 2008 when things were a bit more fast and loose this may have happened, but these days I’d be very surprised. Be careful what you post on here, I notice you are often commenting negatively about Realtors in general making false blanket statements like this one, which is treading the line of being in violation of Article 15 of the Realtor’s Code of Ethics which states “Realtors shall not knowingly or recklessly make false or misleading statements about other real estate professionals, their businesses, or their business practices.” 

[Eliott Elias]

Quote from @Steve K.:

Quote from @Eliott Elias:

Quote from @Jay Hinrichs:

Quote from @Russell Brazil:

Quote from @Eliott Elias:

Many realtors make commissions on each loan they refer to the lender. Money is money, as long as your realtor vets your lender there should be no reason to change. 

This is 100% false and illegal.

unfortunately for this member he is often very wrong with his posts.. this is just a prime example. Not only incorrect but Illegal activity I wonder if he is an agent ..

 It is 100% illegal to do this. It is unfortunately the case with a lot of realtors and lenders, I was merely providing a reason as to why the realtor may have been pushing the client to go with their lender. 

Really? A lot of lenders and Realtors do this? Simply not true in my experience, I’ve never heard of it even once and I don’t know any agents or lenders that would be that dumb. Frankly your comment is a reckless statement to make. Maybe prior to 2008 when things were a bit more fast and loose this may have happened, but these days I’d be very surprised. Be careful what you post on here, I notice you are often commenting negatively about Realtors in general making false blanket statements like this one, which is treading the line of being in violation of Article 15 of the Realtor’s Code of Ethics which states “Realtors shall not knowingly or recklessly make false or misleading statements about other real estate professionals, their businesses, or their business practices.” 

 Here is a article that may open your eyes. https://money.cnn.com/2017/01/...

This is unfortunately how many have conducted business. Use it as education, nothing more. I'm not accusing anyone of doing this, simply stating what has happened. 

[Steve K.]

Quote from @Eliott Elias:

Quote from @Steve K.:

Quote from @Eliott Elias:

Quote from @Jay Hinrichs:

Quote from @Russell Brazil:

Quote from @Eliott Elias:

Many realtors make commissions on each loan they refer to the lender. Money is money, as long as your realtor vets your lender there should be no reason to change. 

This is 100% false and illegal.

unfortunately for this member he is often very wrong with his posts.. this is just a prime example. Not only incorrect but Illegal activity I wonder if he is an agent ..

 It is 100% illegal to do this. It is unfortunately the case with a lot of realtors and lenders, I was merely providing a reason as to why the realtor may have been pushing the client to go with their lender. 

Really? A lot of lenders and Realtors do this? Simply not true in my experience, I’ve never heard of it even once and I don’t know any agents or lenders that would be that dumb. Frankly your comment is a reckless statement to make. Maybe prior to 2008 when things were a bit more fast and loose this may have happened, but these days I’d be very surprised. Be careful what you post on here, I notice you are often commenting negatively about Realtors in general making false blanket statements like this one, which is treading the line of being in violation of Article 15 of the Realtor’s Code of Ethics which states “Realtors shall not knowingly or recklessly make false or misleading statements about other real estate professionals, their businesses, or their business practices.” 

 Here is a article that may open your eyes. https://money.cnn.com/2017/01/...

This is unfortunately how many have conducted business. Use it as education, nothing more. I'm not accusing anyone of doing this, simply stating what has happened. 

 I’d say that this is one example but definitely an exception to the rule and not how “many have conducted business” as you state. Like I said this was more common prior to stricter enforcement came into play after 2007-2010, and your article is from the time period directly after that when regulatory bodies started cracking down on it. I don’t know anyone dumb enough to do this now and saying “a lot of lenders and Realtors” are doing this is a false blanket statement and borderline ethics violation IMO. I agree with Jay that a lot of your comments on here are questionable at best but you do you. 

[Sam Yin]

@Ryan Swigart

For the OP, as you can see, the discussion of this concern all leans towards one direction. Agents are really looking to get a transaction closed smoothly.

Experience on here overwhelmingly agree that all lenders are not created equal. The came can be said of buyers.

I think the best solution for you is to do what you feel comfortable doing. If you do not want to go through the hassle of resending all your financials again, do not do it. If you feel something seems shady, then walk away from it. Only time and experience will guide you to your comfort zone.

But I will reiterate the consensus, agents generally look out for the interest of the parties involved and are just trying to help you close your deal smoothly. Experienced investors know that some lenders have trouble closing deals that others have no issue with.

I am limited on my experience compared to many on this forum, but I'm currently on my 30th real estate transaction that has spanned 25 years. I have seen my share for struggling lenders and strong lenders that can help you get a deal closed. Put some weight on the the agents recommendation.

[Kelly Asmus]

It is illegal for agents to receive kickbacks from Lenders. We refer experienced professionals who can execute, expedite and help our clients have a wonderful experience. Doctors refer other doctors. Realtors refer contractors, lenders, inspectors, etc. It's how business gets done. 

As a listing agent I would absolutely warn my sellers if a buyer had a lender who performed poorly in our market. That's my responsibility. Buyers with poor performing lenders will have difficulty getting their offers accepted. Reputation matters, especially when you're in competition with others to make your offer shine. 

[Blake Novotney]

She likely urged you to use a lender she is familiar with for the exact same reason you went back to this particular agent again, because of a past experience. I have lots of lenders who I pray I will never have to see their names again. But a highly skilled and proven lender will make or break the transaction. I want my clients using someone who I know will go to bat for the client if things start hitting the fan.

[John Clark]

Quote from @Ryan Swigart:

She said since she is not familiar with that bank it will make the offer weaker.

 

How does YOUR (the buyer's) agent's ignorance of your lender make YOUR offer to the seller (who may or may not know your lender) "weaker"?

I have dollars to doughnuts there's a kickback somewhere, and (ahem) "someone" won't get it if your bank is used.

Also, I have to ask: Is this a dual agency situation? Someone else in her brokerage is representing the seller?

[Jay Thomas]

It's important to be mindful of who you choose as your Real Estate lender. You don't want to find yourself in the middle of a deal with an unreliable lender that changes terms or fails to close - which is why it's always worth taking the time to get pre-approved and compare those offers with other loan options available. Doing this will help ensure you're going with the right provider so you can guarantee a smooth Real Estate transaction experience!

[Jeff S.]

@Ryan Swigart Realtors make their living making deals close. While you may chase a 1/4 point with Bank of America or a dishonest mortgage broker you may well end up in a nightmare situation that ends up failing. Real estate brokers generally have already experienced those nightmares and know best not to repeat them. Have done both sides and experienced the real estate agent side of the business to be more honest and ethical. Go with the advice she gives you and don't bite when you see another broker advertising a lower rate as it isn't always what it seems.

[Conner Olsen]

We cycle through many suggested lenders. Just like anyone else, people are really good at their job, they get successful, they get a lot of referrals, they get busy, they get overworked and things slip through the cracks, then we find new ones. You can use theirs for a preapproval and use yours for the actual loan if yours has better rates.

[Andres Saias]

You should use a lender you feel comfortable with and don't limit yourself to one lender. Get pre-approved with several lenders to see which offers you the best terms. If a lender starts to change the deal at the last minute it's good to have a fallback plan. 

[Kai Kopsch]

@Ryan Swigart , a good realtor, has his team together to ensure the transaction goes smoothly. It's a learning curve after getting burned with lenders always being late or worse, unable to close, and inspectors who don't find anything, you find the team you know never will fail. I have a 100% closing track record with my current lender. I will work with a new lender my client likes, but only if they know them very well.