Has anyone else noticed that the banks (in some cases) are requiring buyers to get pre-approval from their perferred lenders. They are going as far as requesting that the buyer have money in their bank accounts for up to 12 months.This is beyond some banks' requirement that the buyer per-qual with them and the buyer is still left with a choice of lenders to use.Is this being lead by the banks or listing agents?
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Hi Mike,
I can only speak from my experience, but this is being lead by the banks.
I have one bank that requires all buyers to receive a pre-approval from a lender they designate to be submitted with their offer. No designated pre-approval, no offer submitted.
That being said, the buyer can use their own lender for their financing, they are not required to use the banks designated mortgage company, only to get pre-approved by them - which is usually the second pre-approval because they have already been pre-approved by their lender.
The reason we were given for this is that there is a 30% fall out rate across the nation on bank owned property transactions with this company and they are trying to minimize this figure.
Even though agents representing the buyers are not happy with this, those are my instructions from the seller and that is the way it is.
One interesting note is about 25% of the buyers are switching to the company doing the required pre-approval because of the loan products they have to offer, while others continue with their current lender.
Hope this helps. It is not the agents who dream up these things for their seller, it is the seller's requirements.
Replies
I can only speak from my experience, but this is being lead by the banks.
I have one bank that requires all buyers to receive a pre-approval from a lender they designate to be submitted with their offer. No designated pre-approval, no offer submitted.
That being said, the buyer can use their own lender for their financing, they are not required to use the banks designated mortgage company, only to get pre-approved by them - which is usually the second pre-approval because they have already been pre-approved by their lender.
The reason we were given for this is that there is a 30% fall out rate across the nation on bank owned property transactions with this company and they are trying to minimize this figure.
Even though agents representing the buyers are not happy with this, those are my instructions from the seller and that is the way it is.
One interesting note is about 25% of the buyers are switching to the company doing the required pre-approval because of the loan products they have to offer, while others continue with their current lender.
Hope this helps. It is not the agents who dream up these things for their seller, it is the seller's requirements.