Can a seller deny offers financed by certain banks?

[Paul Cordero]

I preapproved a borrower to put in an offer, but the listing agent denied the offer because it was from a big bank. There is a misconception that my bank won't finance a "flip" transaction. Our guidelines clearly state that we will, so I forwarded to the buyers agent, to forward to the listing agent. The buyers agent sent the clients to a broker thinking their prequal would do the tick but I tried to get it through to him that since the loan is under the conforming loan limit, the guidelines will be set by FNMA or Freddie for any lender.

Any suggestions on what I should do here. Is this ethical for the listing agent to do?

[J Scott]

Originally posted by Sandy Blanton:

Virtually no listing contract contains an out for a seller for "contingencies." A ready, willing and able buyer offer can include a financing/inspection contingency. I've never seen a listing contract address contingencies of any type. IMO and experience.

This makes no sense to me. A buyer is not "able" unless they have the money. And until they get a clear to close from a lending institution's underwriter, they don't have the money. So, until they get that CTC, they are not "able" to purchase the property.

I *very* often will discriminate against buyers based on their lender. We've sold a lot of properties in our area, and we see the same lenders/brokers over and over. There are several brokers we won't do business with anymore because they failed to perform in past transactions (or were just idiots).

A seller can't be forced to accept an offer, and other than the few obvious legal requirements against discrimination (Fair Housing Laws), a seller can turn down a buyer for any (or no) reason whatsoever. Including not liking the lender.

Here's an example to think about: Let's say you have a property that's gone through 5 title changes in the past 2 weeks. Now the seller wants to sell it for $100K increase in value with no work done. There is ZERO percent chance that an FHA underwriter would approve a loan on this property. But, let's say that a buyer's idiot mortgage broker says, "Oh, that's not a problem...I can definitely get this loan done." And he issues a pre-qual letter. We all know it's not possible, but are you saying that the seller has to accept the offer because the buyer has a pre-qual letter?