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I don't care WHAT the instructions are... you WILL submit the offer...

I am getting pretty tired of seeing...

Offer will not be submitted to seller unless buyer prequalifies with ___ Mortgage.

Let me give you a clue... Yes, you WILL submit the offer. It may be rejected by your client, but you will submit the offer. If you don't, feel free to send me a note in writing stating that you won't submit the offer per instructions from your client.

I will take that note to the Georgia Real Esate Commission and you will be in a load of hurt... License Law requires that ALL written offers be submitted to the seller... If my buyer offers $6.50 and a moldy BLT sandwich... in writing... it HAS to be transmitted to the seller.

Again, they can choose not to accept it... but you can't choose not to submit it.

Now, if you really want to get that language in there in order to press for business for your mortgage buddy, you can state...

Offer will not be accepted unless buyer prequalifies with ___ Mortgage.

Those are slightly different.

But herein lies the rub... or this rubs the lies, one... I was talking with a bank property disposition dude... and we were talking about a few of the properties that he has listed with another agent. Each of them had a requirement that the buyer prequalify with a particular bank... But, it isn't his requirement. It was a requirement the AGENT decided on... He was cool with it, because it kept out some of the riff-raff, but he stated flatly that if an offer came across his desk without a pre-approval, he might counter with a PQ... And if it came with a PQ from another lender, he would look at that as well.

So, this particular agent wasn't being honest.

And, between you me and the other 148,367 members of this site, I was wishing I had a buyer for one of her properties so I could see if she submited an offer. I know the guy on the other end... and I could check.

Be careful out there... You could LOSE your license.

Failing to submit an offer in a timely manner could result in suspension or revokation of the licensee's license. And it would be pretty tough to run the blossoming REO business without a license. And if another agent got wind of a failure to submit an offer... an offer that could have gotten their client a home... I would bet they would pursue it.

And it is also possible that there could be a deeper financial impact... like a lawsuit for lost commission from a buyer's agent... or a lawsuit from a seller over not getting an offer...

Sure, I'm kind of a butt-head and I work VERY hard to protect the interests of my client... but I'm not alone. There are some smart agents out there... and there are some of us that know a few people. Doing something silly like this could damage a career...

To paraphrase the famous ads:

Just don't Do It!

And sellers... don't ask your agent to do things that will result in them losing their license... and if you do ask, expect them to say no.

I'd love to hear from you...

Posted by Lane Bailey - REALTOR & Car Guy on 06/03/2009 12:01 PM

Comments (15)

Prequalification Letters in the Home Selling Channel

business of real estate, honesty, ethics, buyer, seller, client protection

Originally posted at: Looking Out From the Garage: I don't care WHAT the instructions are... you WILL submit the offer...

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15 Comments on I don't care WHAT the instructions are... you WILL submit the offer...

JUN

Whoa, that is the first I have seen that in the instructions. In my marketplace, we have only 1 real estate office who is notorious for placing stuff like that in their instructions and then attributing it to their vendors wishes. While I can see that there may be some benefit to the client, there is clearly more benefit to the agent and his mortgage associate, which is the more likely reason for this to occur.

I hope you nail them on that as being an illegal practice before it spreads.

HI Lane,

I hate reading those remarks in MLS as well. When I see that I move on to another listing that doesn't require that. I think that is BS.

Wow - great post. I don't think you are a butt-head. I think you have the intestinal fortitude to speak the truth and speak it boldly. We need more people willing to do the same. What you write about is happening here in California - as I suspect it is all over America. Those who feel they have the keys to the kingdom also feel they have the power to rule it. We have seen the rise and fall of those who attempt to use power they only believed they had however without the authority to use it!

Hi Lane~ NO ONE can force any buyer to use a specific mortgage company! As long as the buyer can get a mortgage, they can buy the house. What about those that are paying cash?? They can't write an offer and buy it? Sounds pretty crazy and unlawful to me! We are to follow seller's legal and lawful instructions. We (nor sellers) are not to dictate that a buyer has to use a specific mortgage company!!

I believe agents are doing their sellers a serious disservice when they try to force a buyer to prequalify with a given lender. If that turns away even one potential offer, you are failing your seller.

What about the reports of the lenders running credit many times and thereby lowering the score on a borderline buyer who did not want to use the "required" lender? There are shenanigans galore.

Wow, Lane. It seems to me that the agent was doing their client quite a disservice either by 1) requiring that the buyer go through only one specific mortgage company or 2) not letting their client know the ramifications of limiting themselves that way (if, indeed, it was the seller's request). Either way, not a smart way to do business, especially if you can lose your license over something so easily avoided.

Lane there are two sides here. Firstly I agree whole heartily that an agent is in violation of RE laws if they don't submit an offer - we are obligated to submit all offers. Period.

However due to all the online, out of reach, unknown lenders out there that buyers go to get their pre-qual letter from I don't think it's out of line that the seller requires that they be qualified with a lender of the seller's choice. That's not saying they have to use that lender. Just that they (the seller's) want a pre-qual/pre-approval from someone they know and trust. Is that a power play? Not meant to be... just a precaution.

Lane- Haven't seen this in our area, but it is against license law here too as all offers will be presented. I know this doesn't happen all the time, but it is the law. Better be sure to not get caught if you are not following it.

Lane, how about this one?

Buyer agent to pay 1900.00 fee to the listing agent.

Not allowed but still in the MLS.

Robert - It is a common practice with some market segments...

Angelia - There are just too many of them to ignore and move on... and if that is what my buyers like...

Kathleen - Thank you.

Vickie - Cash offers often have to show proof of funds...

Jon - I agree...

B & C - That is really nice... I hope that there is jail time involved if someone gets caught on that one.

Heather - They only have to qualify through that company... not use them.

L & P - There is a balance... But for some agents I think it is a way to steer business to their friends.

Kim - I'm surprised...

Missy - That is just hilarious... in a bad way.

Lane - we see it here too. Usually it just says "must prequalify with xyz...." we went all out for one of our buyers, well actually we just did want we needed to do for the best interest of our client. The buyer loved the house had a very strong preapproval and the listing agent insist on must prequal bla bla... had even a separate document to sign for that. Yeah, I don't think so. Our buyer eventually got their approval to stick (much disappointment to LA). Seller had nothing to do with it. That reminds me there were so many other issues with that deal. ~Rita

JUN

Rita - I'm not shocked...

JUN

Lane...this is so right. This offer not presented thing does not work for me either. We all need to crack down on each other!

JUN

Thom - I had a conversation with a buyer through my blog (meebo IM box) this evening about her agent balking at presenting an offer because the LA requires a PQ by BoA (was that enough initials?) I told her that her agent AND the Listing Agent are required BY LAW to present any written offer..

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