Anyone who can help please reply to the following question. I recently wrote an offer as a buyers agent. . When i first met this buyer he had a pre approval from a country wide lender in Dalla Texas we are in Eugene Or about 2000 miles away. After speaking with this lender on the phone a felt it was best for my client to use a local agent I trusted. My client met with the agent and loved her. As she is one of my go to finance people she was able to pass a little savings onto him and also lower his rate. I found him the perfect house in his price range listed at $149900.
The listing description noted that a 24" flat screen TV was to be given with seller approved financing. The refrigerator was noted in the MLS as included. Ther was no mention of a specific lender in the MLS notes just that the TV was to be given with seller approved financing. I thought this meant he was to approve my buyers mortgage broker before accepting the offer by interviewing or other research. I totally agree with this! I assumed once he spoke with my lender and we had full bank approval we could move forward. Boy was I wrong. However I think they crossed into blatant mortgage steering. This is a complete violation of the respa fair trade act of the early 80's. If anyone can pleas read further and help me decipher if this is indeed a violation. Also tell me when the respa act was implimented and what the statute number of this type of steering violation is.
I wrote an offer of $145000 with seller paying $5k in closingt costs. VA financing with my buyers lender. I listed all contact info for sellers approval of the financing on the sale agreement also included the pre approval letter. We gave 4 response days for plenty nof time for the seller to review financing. I also list the TV and refrigerator on the personal property section of the sale Oregon sale agreement.
The seller countered with this exact addendum 36 hrs after our offer had expired. This upset my buyer as he discoverd they where hoding an open house on the day they where supposed to respond. However this is not the problem or a legal concern. They sent me a counter to our offer via email.
Here is exactly how the counter offer was written.
Sellers 1st counter:
Sales price to be $152500
25" flatscreen TV to be included in sale.
Buyer to get financing (from a different finance company than I had listed for approval).
Seller to pay $5000 in closing costs.
I was fine with the price and closing costs as was my buyer. However he did not want to use thier financing. Further more the counter offer wording is illegal. You cannot make the buyers change finance companys as a contingencie to a sale. My buyer was very upset at the prospect of having to change finance company's. I aasured him he did not have to use the company in the sellers counter, and called the listing agent and asked if my buyer could use his own lender and seller keep his TV to try to avoid the steering situation altogether. He said indeed my buyer using this financing company was very important to the seller and he did not think he budge on the subject. I said "my buyer has to use the seller as a licenced morgage broker paying him a commission to purchase his house" He said yes thats what his seller insists but he will not actually be doing the loan. I said "he must be getting a referral or it would not matter as long as he was comfotable with the lender my buyer chooses". He did not answer. I then said "Thats totally illegal you know"! He told me he would call me back after speaking with his principal broker about it.
At first the listing broker agreed that this was illegal and apologized after speaking with his principal broker. I said I was willing to forget the whole thing I just wanted my buyer to get the house and use a lender he trusted. He then called me back after meeting with his seller 2 hrs later the same day. He stated on the phone that the counter offer wording was indeed legal because of the TV offered for seller approved finance was an incentive to use his finance company. I stated the wording did not reflect just an insentive as they where not connected in any way on the counter but two seperate contingencies to the sale.
I discontinued the argument and told the listing broker my buyer would not take the TV as he did not know anything about this company or it's fees and rates. I also told the listing broker my buyer had a fiduciary relationship with his lender and it would be unethical to interfere with that. however we would be more than happy to give him time to interview the lender and open escrow only after initial approval is satisfactory to to seller.
I then rejected sellers 1st counter and countered as such thinking once again the seller wanting to be the lender was off the table.
Buyers 1st counter:
Sale price to be $150000
Seller to contribute $5k to closing
Buyers finance to remain the same as listed on the sale contract. and added buyers Lenders phone # name etc.
24" TV not to be included in sale.
The seller then rejected my buyers 1st counter and counted and countered with this wor for word.
Sellers 2nd counter:
Sale price to be $154000.
seller to pay $5k in buyers closing costs.
TV not to be included in sale.
Buyer to use his own financing
Buyer to be pre approved by (The lender the seller works for ) within 48 hrs of mutual agreement.
I immediatly called the listing agent and said your seller is actually going to raise the price of his last counter if my buyer does not use him as a lender. He said yes. He then told me I should consider having my consulting my buyer to use the sellers finance company to get the lower price, and end the negotiation. I said I will over look giving up the TV even though you never specified buyers where to use the sellers own finance company in the MLS listing. I can accept that is an incentive for such. Your seller can also raise the price at will while negotiating at any point before mutual agreement. Where I Belive they are breaking the law is changing previous offers of price, and threataning not to sell (though mostly verbal the sellers 1st counter is arguablly written fact of this) unless they use the sellers finance company> Worse yet wanting my buyer to agree in a binding sale agreement with $1500 of his money in earnist without any kind of good faith.
Am I right? Is this blatant mortgage steering? If my buyer agrees to use thier financing to get the better price so he can qualify is his $1500 in earnist money going to be in jepordy if he diagrees with fees, rate, or personallity of the seller and refuses to use him after the good faith estimate? What would you do? My buyer still really wants this house he cant qualify for $154000. He also is not willing to use the seller or anyone associated with him for financing.