Legal Question in Real Estate Law in California
Differential Treatment with Home Purchase
My husband and I made an offer on a home. The seller's agent refused to neg., and because we liked the home, we agreed to price, 644,000. We received a counter offer that stated we must pre qualify with their lender. In our counter offer we refused, but sent documented proof of the fact we have been PRE APPROVED with 3 major lenders. The word REJECTED was scrawled over the counter offer we sent and faxed back to our agent, without the seller's signatures, just that word in bold marker and the sentence we had our agent type, in which we refused to prequalify with her lender- circled..
What avenues can we explore? We really like the house but I do not want to prequalify with her (the agent's) lender. Especially since we have already been pre approved by three others. Can we force a sale, since the sellers and my husband and I have already agreed (and signed) all other terms including price? Can we be forced to use her lender?
When our agent told her we didn't want to prequalify with her lender, she told him it was a deal breaker. I am African American, my husband is African. This is also NOT a requirement listed on the MLS nor is it a requirement of her real estate office (we checked.) Please help! Thanks.
1 Answer from Attorneys
Re: Differential Treatment with Home Purchase
Is this new construction or a re-sale? With new construction, it is common for the seller/builder to require that prospective purchasers be APPROVED for a loan with a specific lender. This is generally so that the builder's lender is comfortable that you will qualify for the loan and go through with the sale. This doesn't mean you have to be financed through this particular lender. You will use your own. This is legal.
If you are buying foreclosure property (that is owned by the bank), it is also common that the bank (the seller) will require buyers to be prequalified through their lending arm. Again, this does not mean that you are required to purchase through them - only that you are qualified to do so. You may still use your own lender of choice.
If however the seller is requiring that as a condition of the sale that you be financed through a specific lender, then this conduct violates RESPA (the Federal act which governs loans on residential property). In this day, I would be shocked if a seller or his/her agent actually did engage in such conduct, because it could potentially expose him/her and his/her company to many damages.
If this is truly the case, we would be interested in reviewing the underlying facts more closely with you.
Good luck.
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