Selling Realtor and Strong-Arming the buyer

[Fivegeckos]

Indiana

This is my situation. I work for a mortgage brokerage in Indiana. My client wants to purchase a home. I suggested they contact a real estate agent to help them in the process of finding a home that best suited their needs. They looked around for a couple of weeks but didn't find a realtor that they liked so I suggested they call a particular realtor. It was a match... they liked the realtor and the realtor was thrilled to be helping out.

Some time passed and after many trips from one side of Central Indiana to other, the client found a home that they liked and that they could afford. So, the realtor presented a reasonable offer on the home to the seller's agent. (This is where the problem begins.)

The Selling realtor works for a bank... or rather a lender. The property had been forclosed upon and now needed sold. So, in the counter offer, the seller's agent presents the buyer with 2 options. Either A.) the buyer can use my services and get 100% financing but pay over $3,000.00 more OR they can choose to use the Seller (The lending instituion that is being represented by the seller's realtor.)

Is this not a strong-arm tactic? Doesn't the law prohibit a seller or seller's real estate agent from penalizing a buyer for not using a service that they offer or recomend?

The buyer's realtor was then obliged to present this offer to the her clients. They, luckily enough for me, chose to continue working with me in order to obtain their financing. She, the buyer's agent, asked a colegue who is in MIBOR, the locoal board of realtors, if this practice was legal. She has received mixed reviews. One person she spoke with stated that it was legal if the seller/lender and the seller's agent uniformly presented this tactic to all buyers. I do not see what that would have to do with it. In fact wouldn't that make it worse by not only wronging in one transaction but in many? Another party she spoke with wasn't sure of the legality but stated that it was certainly unethical. Are their not ethics boards who govern these professionals?

I have been doing this for many years and honestly, I've never found anyone who has used a tactic like this to push their business relationships on to their customers. Any words of advice would be GREATLY appreciated.

Thank you.

[PghREA]

Originally Posted by Fivegeckos

Indiana

This is my situation. I work for a mortgage brokerage in Indiana. My client wants to purchase a home. I suggested they contact a real estate agent to help them in the process of finding a home that best suited their needs. They looked around for a couple of weeks but didn't find a realtor that they liked so I suggested they call a particular realtor. It was a match... they liked the realtor and the realtor was thrilled to be helping out.

Some time passed and after many trips from one side of Central Indiana to other, the client found a home that they liked and that they could afford. So, the realtor presented a reasonable offer on the home to the seller's agent. (This is where the problem begins.)

The Selling realtor works for a bank... or rather a lender. The property had been forclosed upon and now needed sold. So, in the counter offer, the seller's agent presents the buyer with 2 options. Either A.) the buyer can use my services and get 100% financing but pay over $3,000.00 more OR they can choose to use the Seller (The lending instituion that is being represented by the seller's realtor.)

***A: She was giving the Buyer other options. The Buyer has the final choice in selecting the lender.

Is this not a strong-arm tactic? Doesn't the law prohibit a seller or seller's real estate agent from penalizing a buyer for not using a service that they offer or recomend?

***A: I don't think this was a penalizing issue - she most likely showed the Buyer the differences in the estimated costs sheets between the 2 lenders.
She was showing how the Buyer would end up paying over $3,000 more by using you as a lender.

The buyer's realtor was then obliged to present this offer to the her clients. They, luckily enough for me, chose to continue working with me in order to obtain their financing. She, the buyer's agent, asked a colegue who is in MIBOR, the locoal board of realtors, if this practice was legal. She has received mixed reviews. One person she spoke with stated that it was legal if the seller/lender and the seller's agent uniformly presented this tactic to all buyers. I do not see what that would have to do with it. In fact wouldn't that make it worse by not only wronging in one transaction but in many? Another party she spoke with wasn't sure of the legality but stated that it was certainly unethical. Are their not ethics boards who govern these professionals?

I have been doing this for many years and honestly, I've never found anyone who has used a tactic like this to push their business relationships on to their customers. Any words of advice would be GREATLY appreciated.

Thank you.

My company is affilated with a mortgage company. Obviously, the company would like all our buyer's to use it. We do offer their services to our Buyers - but buyers are not obligated in any way. We can't penalize a buyer for not using our mortgage service because we have no control over what other lenders charge for funding fees/loan application fees and "junk" fees.

[Fivegeckos]

I see what you are saying about this issue. If in fact the agent was demonstrating the difference between the two, that would be agreeable; however, that is not the case.

She specifically stated in the purchase agreement that the purchase price would be "$x" if the borrower chose to use her company. The borrower had not so much as put in an application with the seller's company. They had no way of assertaining that the "cost" would be more or less. They also did not know the fees/costs of the loan that I was presenting other than the fact that I provided a Pre-qualification letter for the agents.

The seller was the bank who forclosed on the property. The agent worked for the seller. She was pushing the seller as the lender. It was wordes as such...
"IF you chose to obtain financing through XXX lender/Seller, then your purchase price will be $100,000.00. IF you chose not to use the seller as your lender, then the purchase price will be $103,000.00.

Thus, is she not strong arming the buyer into obtaining home financing with the seller/lender by increasing the purchase price IF the seller used their own financing?