Legal Question in Real Estate Law in California
My question involves real estate located in the State of California:
Hi All! I am in a tight situation in a property purchase that I was wondering if any of you could give me some legal advice. I'm buying a property through an agent who is an employee of the listing agent. Although, it is 2 separate persons but everything appears to be from 1 as my buyer's agent takes all directions from the listing agent, who is his boss.
Anyway, what happened was that they forced me to use their preferred lender to pre-qualify me before they submitted an offer even though I already had a pre-approval letter from a broker who I have been in contact for the last 3 months, which was fine with me. After the offer was accepted and fully executed, I had a change of mind on the lender and wanted to use my broker because their preferred lender would have cost me >$10K in closing cost while my broker costs $0 with the same interest rate. When I announced my intent to change lender, the listing agent immediately demanded an underwriting approval from me and my loan broker which we cannot furnish because the escrow office haven't given him any necessary information for him to complete the paperwork and submit to underwriting for approval. Then she proceeded on to say that the contract is now null because it was drafted up with a conventional loan but I'm going the route of FHA loan and that she didn't know about it until now. The funny thing is that her preferred lender gave her a pre-approval that I qualify for an FHA loan. She said we would have to do a new contract and that the seller may not agree. My broker pushed her for an amendment which she finally agreed and had my representing agent (her employee) to draft up. The amendment specified the change that "Buyer's loan shall be FHA financing, with a direct lender", which implies that I have to work with her preferred lender, who is a direct lender, and that I must terminate my loan broker. Her preferred lender, who had called me up the previous night and basically gave me a verbal threat that if I don't use him, I will lose the house, and that nobody else can help me except him. My questions are as follows:
1. If the contract was drafted with Conventional Loan and I'm doing FHA loan, can it be really be considered invalid and an amendment is required?
2. Should I sign the amendment?
Anything else I can do short of backing out of the contract or acquiesce to their demands? At this point, my loan broker has already withdrawn. I can search for a direct lender but the listing agent verbally said that the seller WILL NOT sign the amendment until she sees a proof of appraisal. She guarantees that if I sign the amendment and work with her lender, then I will get the property, possibly earlier than planned.
Thanks for reading my post and thank you in advance for your legal advice.
2 Answers from Attorneys
You are being railroaded and ripped off. Find another independent buyer's broker and a lawyer immediately.
I agree with Mr. McCormick.
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