Some local buyers are submitting offers to purchase homes only to discover that the seller already has lined up a preferred mortgage lender.
The move is to help sellers avoid wasting time on buyers who can’t ultimately secure the financing on their own. The approach is similar to how developers secure a preferred lender for buyers to use, if they opt to.
“I just had one where the seller would not let us get closing costs paid unless we use their mortgage company – even though we were willing to raise the price to get the closing cost paid,” wrote Carmen Crispeno, an agent with RE/MAX Northwest. “I see it most often with new construction, but I’m also seeing it a few times with normal sellers or REO.”
With a lender in place, a seller can add language to the sales contract that requires a buyer to be preapproved by that lender. Buyers can still apply for a mortgage with another lender, but if that doesn’t work, they agree to apply to seller’s source.
Mark Wilson, broker with Windermere Real Estate on Bainbridge Island, said the seller-lender alliance is not common at this time on the island with private individual sellers.
“Occasionally, I have seen it with new building projects where the seller requires the buyer to get preapproved by their preferred lender but then the buyer can use someone else for financing,” Wilson wrote. “I think that is more so they know that the buyer is qualified before they enter into a sales contract.”