Agent, Lender and Client Relationship??

[MPDano]

Hello all,

I got a question.

If a lender you have been working with recommended an agent for you, then the agent found you a home and you made an offer with the approval letter from the lender. The lender ended up finding out that I found a better lender (got a better loan and interest) and made an offer on another home using the same agent but different lender. The original lender gave me a call and acted like a wining child and told me "get your loans elsewhere!" then hung up.

First of all, I tried to get the original lender to get me a better rate by sending him my GFE from the other lender (concealing his identity of course) to give him the opportunity.

That was the story, now here are the specific question:

1) Since the lender gave an approval letter, isn't he contractural obligated to follow through with it?

2) The Agent is a friend of the lender and I feel now the agent isn't representing me appropriately in the offer process, is there a rule or law that he must?

3) If I lose the house due to misrepresentation, can I have recourse with the Board of Realtors?

I feel I made a big mistake by using the lenders recomended agent.

[kyle422]

1) Since the lender gave an approval letter, isn't he contractural obligated to follow through with it?

I don't think so.

2) The Agent is a friend of the lender and I feel now the agent isn't representing me appropriately in the offer process, is there a rule or law that he must?

Business is business. Why would the agent "not represent you appropriately"? He stands to make money whether or not is lender friend is in the deal. I think you may be a little skeptical because of the situation.

3) If I lose the house due to misrepresentation, can I have recourse with the Board of Realtors?

If you lost the house, it would most likely be because your offer was not the best offer.

I feel I made a big mistake by using the lenders recomended agent.

I disagree. It sounds like the house you put an offer on, is really the ideal place for you. Would you have found this house without the help of the agent you are using.

My advice. Talk to your agent. Tell him your concerns. I'm sure he is going to do all he can to get you that home. After all, he doesn't get paid unless he sells you a home.

[MPDano]

I disagree. It sounds like the house you put an offer on, is really the ideal place for you. Would you have found this house without the help of the agent you are using.

I found this home and all others that I had interest in on my own using various "other" search listings. My agent has basically done nothing to find me this house (he hasn't even been to the property). His dealings has basically been talking to the sellers agent and sending my offers.

Basically I first asked him if there would be a conflict of interest if I went with another lender that I found. He stated that it woudn't. I also told him not to involve his friend (original lender) in this transaction. I was trying to avoid hurt feelings. I thought there was some sort of confidentiality between the agent and myself (buyer)? The agent broke that trust and confidentiality. I also thought RE agents follow some sort of Code of Ethics? The very next day after we made the offer on the home, I get a nasty call from his friend the lender.

[kyle422]

What kind of relationship do you have with the agent; Exclusive Right of Sale, or Transaction Broker?

I also told him not to involve his friend (original lender) in this transaction. I was trying to avoid hurt feelings.

The lender referred you to the agent. You were the one that initiated contact with the lender, not the agent.

I thought there was some sort of confidentiality between the agent and myself (buyer)? The agent broke that trust and confidentiality.

Do you believe that telling your agent to keep it a secret that you are using a different lender really falls under his fiduciary duties, which he may or may not be obligated to depending on your relationship with the agent? I really don't know myself. A better question; Is it worth your time to try to seek retrubution from the agent?

[MPDano]

What kind of relationship do you have with the agent; Exclusive Right of Sale, or Transaction Broker?

I am not really sure, but I think right of sale.

Do you believe that telling your agent to keep it a secret that you are using a different lender really falls under his fiduciary duties, which he may or may not be obligated to depending on your relationship with the agent? I really don't know myself. A better question; Is it worth your time to try to seek retrubution from the agent?

My relationship with the agent is purely business. Just wondering why an agent would tell the lender I was going to use another. What the agent and the lender did was almost teenage girl childish. And yes, losing a $405,000 home due to misrepresentation would be just cause in my opinion. Your thoughts?

[kyle422]

My relationship with the agent is purely business. Just wondering why an agent would tell the lender I was going to use another. What the agent and the lender did was almost teenage girl childish.

One thing to consider is this; the lender and the agent were involved with the potential purchase in the beginning of this venture. The lender may have called the agent (I always keep in touch with lender during the entire process of a home purchase and the lenders usually call me a lot too), to check up on the transaction. I speculate, out of courtesy, the agent told the lender he was out of the deal. Even though you instructed the agent to keep this a “secret”, I seriously doubt he broke any fiduciary duties by telling the lender. The sharing of this information would not affect the sale or financing of the purchase.
I do agree that lender shouldn't have called you to "whine" about it. That is not very professional, but if you would have been honest with him and told him you found another lender and not asked your agent to keep a little secret, don't you think that your actions could have circumvented any confrontation from the lender.

And yes, losing a $405,000 home due to misrepresentation would be just cause in my opinion. Your thoughts?

I have yet to hear an example of how the agent caused your offer not to be accepted by the seller.

[MPDano]

One thing to consider is this; the lender and the agent were involved with the potential purchase in the beginning of this venture. The lender may have called the agent (I always keep in touch with lender during the entire process of a home purchase and the lenders usually call me a lot too), to check up on the transaction. I speculate, out of courtesy, the agent told the lender he was out of the deal. Even though you instructed the agent to keep this a “secret”, I seriously doubt he broke any fiduciary duties by telling the lender. The sharing of this information would not affect the sale or financing of the purchase.

Let me break down the offers, this may help.

Lender #1: Agents friend (lender #1): Made offer on "1st home" using #1 lender

Lender #2: NON Agents friend (lender #2): Made offer on 2nd home.

Both using the same agent, lender #2 was used on the 2nd home because %rate was lower and we could buy more house.

I also never said "secret," the word kind of bothers me since it was out of professional courtesy not to involve the 1st lender. If the 1st house was accepted and not the 2nd, then we would stay with lender #1. The whole issue was these were "totally seperate" offers and a verbal agreement was made to not involve the 1st lender in the 2nd home. I was trying to avoid conflict and trusted the agent and his verbal adult answer.

My mistake was putting trust in the agent to keeping 2 offers, 2 seperate offers. I hope this makes sense to you. Normally the agent keeps in touch with me through out the day. I left voicemails and emails and I have gotten no replies. Can this agent and/or lender just drop out of sight after an offer contract has been submitted to both homes?

I have yet to hear an example of how the agent caused your offer not to be accepted by the seller.

I will try and get an update on this as the agent did say that the seller may make their decision on Sat or maybe Sunday (today).

[kyle422]

O.K. I see where I got a little confused. I thought it was only one house that had an offer. After re-reading your first post I see where you said that. Sorry for my confusion.
You have put yourself in a very precarious situation by puttting in two offers on two seperate homes. What if both your offers are accepted by both sellers? What is your plan of action from there?

[MPDano]

You have put yourself in a very precarious situation by puttting in two offers on two seperate homes. What if both your offers are accepted by both sellers? What is your plan of action from there?

We have enough savings to do an inspection on both homes and see what the report says. We will make an informed decision on which property will be the the biggest $$ pit. We can lose the inspection fees since the home cost makes the inspection fees menial. We are leaning more on the 2nd home since the location is nicer, which is why we offered more $$ than the 1st home. We are just 1st time homebuyers trying to buy a home in San Diego, which is next to impossible already. I will keep you updated on what happens today.

[judyo]

I have to agree with Kyle here. And wow, putting in two offers still sounds dangerous to me. I know you can use a bad inspection to get out but what if the sellers both agree to fix things? In that case you'd have to simply walk away from one of those homes and could lose your earnest money, unless it's done differently out there.

In my area you are never obligated to any lender even if they pre-approved you. You have the right to use anyone you want no matter who you started out with as long as you don't switch at the last minute where it would be impossible to close by the dates agreed on. I would never stop my duties to a buyer just because they decided not to use the lender I suggested to them. Friend or not. That "friend" does not pay my bills.

However, I do have to admit that even my best loan officer does not call me to see if a contract was accepted. We usually don't talk again until the contract was accepted & my buyer continues with the loan. I guess if he doesn't hear from the buyer after a while he might call me first to see if anything transpired but he'd probably also call the buyer to follow-up. I have had a loan officer call an agent in my office to tell her that "their" client bought a fsbo.

That was very unprofessional for the loan officer to do. However, I still don't see why the agent would stop providing service because of this.