Owner is Mortgage company, mandating pre-approval through them

[morphius]

What is the name of your state? MI


I'm trying to purchase a house that I was renting that went through foreclosure.They gave me a price and we made an offer on it. However, they have rejected my offer on the basis that I'm not preapproved through them. They state I don't have to get the mortgage through them, but that I need to be pre approved. Is this legal??

To me it's a conflict of interest, given they are owner and mortgage company. I could do it, but they are looking for my finacial information to justify the high price they are asking. (ie he makes enough, we can get this price) Please note, I am pre-approved through GMAC because I am a GM engineer with awsome credit.

The house is priced at 140K. We made a starting offer at 100K. The house needs some repair, garage door, reroofed, and other misc things. By no means perfect. Other comparable houses are selling for 128K with updates (new furnace, roof, plumbing, carpet,etc). In all rights, the 100K is reasonable. They are just looking for justification to overcharge me for it, and I'm wonderign if it's legal for their request and why they regected my offer.

[pojo2]

So what's the big deal if you want the house. They just want to know that before they tie the property up for 30-45 days that you can afford it. Actually that is what many sellers want and the bank is no different.

Did you tell them you are pre approved through GMAC?

[morphius]

Originally Posted by pojo2

So what's the big deal if you want the house. They just want to know that before they tie the property up for 30-45 days that you can afford it. Actually that is what many sellers want and the bank is no different.

Did you tell them you are pre approved through GMAC?

Yes, they have got a pre-approval letter from GMAC, on my behalf.


Look at it this way, let's say you want to purchase a new Chevy cobalt. You've already got pre-approval from your own bank on a loan. But when you got to purchase the car, the dealer tells you that you can't until you are pre-approved through them. Would you agree?

[pojo2]

Would not bother me if it moved the process along faster.

[Gadfly]

You said:

They state I don't have to get the mortgage through them, but that I need to be pre approved.

but you title says you have to be pre approved through them. which is it?

[tranquility]

You make an offer, the owner can accept, reject or counteroffer. Your offer was based on obtaining financing (as evidenced by your letter from GMAC) and the owner does not need to accept your offer. In general because of the quirks of real estate, the listing by the owner is not considered an offer. You could come up with cash for the full listing amount with no contingencies and the owner does not need to sell to you.

The only restrictions on this are constitutional. i.e. you can't discriminate based on race, sex, gender etc. (There are some exceptions to developments designed for the elderly. There can be a discrimination based on age there.)

If you want the house, get the owner's pre-approval.

[xylene]

Am I reading this correctly:

They require that you be approved.

The are asking 140K

You countered with 100K

They rejected it, but your frosted that they want you to be approved through them?

They don't have to accept your low ball offer. The financing approval is a side issue.

[morphius]

Originally Posted by xylene

Am I reading this correctly:

They require that you be approved.

The are asking 140K

You countered with 100K

They rejected it, but your frosted that they want you to be approved through them?

They don't have to accept your low ball offer. The financing approval is a side issue.

I didn't expect them to take $100K for it. But in the interest of acheiving my final maximum I'm willing to pay, I started there. I can always go up, but not down. I expected them to counter. Houses are selling for $128K with updates. This house NEEDS updates, so something less than 128K is MORE than fair. And yes, I agree they can ask whatever the hell they want, but that doesn't mean they are going to get offers for that. It's estimated that there are in excess of 20 houses forsale for every person looking for houses here, that's how crappy the market is. Record foreclosures.

What frosts me is their requirment that I be preapproved through them. Even if they, the mortgage company, is the owner. Remember I'm already preapproved through GMAC. I shouldn't need to be preapproved through them.

I truly think they are pricing and justifying the price of the house, based on the pre-approval. For instance, if I walked into a Corvette dealer with 100K, and laid it on the table. Told them I wanted a corvette. Do you think that is a good way to bargain on the price? Or do you go in and bargain on price first, then inform them you are made of money and will pay in cash?

or What if you are purchasing a house through a private seller? Is it justified to allow the seller to pull your credit history to purchase the house?? Even though you are pre-approved. This is no different.

[morphius]

Originally Posted by Gadfly

You said:


but you title says you have to be pre approved through them. which is it?

I mean exactly what I wrote. I need to be pre approved through them. You seem to be lost!

[xylene]

Originally Posted by morphius

Is it justified to allow the seller to pull your credit history to purchase the house?? Even though you are pre-approved. This is no different.

It seems justified and intelligent; the exact legalities involved are no doubt complex.

But this is not a car dealership or a private seller.

Unless there is some cost or compelling reason, then why are you not willing to do this?

put another way...

What does your real eastate lawyer tell you?

[pojo2]

What the hell difference does it make if you want the house? If you don't then stand on your principles and loose it!

Sat. purchased a very expensive (155K+) automobile. I wrote them out a check and they told me if they could pull a credit report I could walk with it that day, I said no problem and picked it up a few hours later.

Why, I paid them with a check, no credit needed? Because my credit rating is very indicitive of the financial responsibility I possess and a good indicator thatf my check might still be (they called it in) good when it hit my account.

I had no problems, so why do you on this transaction IF you want that house?