Builder forcing to user their lender. Agent is not helping to handle the issue ! How can I proceed?

Hi,

I have signed a purchase contract for a new home which is under construction. Planning to close the home in next few weeks. Builder is forcing me to use their in-house title and closing company to do closing. In fact, I have chosen a third party lender and The lender is offering me a part of the closing costs if i use lender's preferred title company and closing attorney. I thought of going with the 3rd party guys. But, My builder forcing me to use theirs. I'm requesting my agent to negotiate the builder either to provide the closing costs what i'm able to get outside or allow me to use lender's preferred title company and closing attorney. Agent is not helping me in this though the purchase contract clearly mentioned as follows :

"Purchaser may obtain financing from any lender selected by purchaser that is acceptable to Seller, and Purchaser may obtain closing services from any closing attorney selected by purchaser that is acceptable to Seller, the place of closing  selected by purchaser also must be acceptable to seller. Purchaser may have title insurance obtained from desired provider, purchaser should confer with the closing attorney regarding the selection of the title insurance provider."

Should I hire an attorney to handle with Builder? In fact, Builder is not answering my questions regarding this matter.

Thank you very much for your suggestions and time !!


  • December 03 2013 - Cumming
  • 0
    0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Be a Good Neighbor. Be respectful and on-topic. No spam or self-promotion! See our Good Neighbor Policy.

Answers (10)

Profile picture for paulersh
I recently moved into a Ryland home.  I also got the $5,000 "discount" (i.e. incentive) to use Ryland Mortgage Corporation.  I did some mortgage shopping and found another lender that beat Ryland by $5,500 (on apples-to-apples GFE comparision).  However, Ryland made it very clear, I would lose the $5,000 if I switched.  I tried my best to negotiate with no success.  Ryland said I was free to close with Bank of Blue Valley, but I would lose my $5,000 "discount" for not closing with RMC.  In fairness to RMC, they're competive with Wells Fargo, Chase, and the other huge lenders.  They're just not competitive with medium sized regional banks like Bank of Blue Valley, that have special programs for their most well qualified buyers.  I have no affiliation or affection for Bank of Blue Valley, they just happen to be the lender I found with the best terms given my situation (780 credit score & 20% down)
  • April 15 2014
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for Ofe Polack
Why? did you sign the contract if you had reservations about the lender.  What lender pre-approved you?
You say you are planning on closing in a few weeks, what lender is processing your mortgage at this point?  Something is not right?!  
  • December 06 2013
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Hi All,

Thank you very much for your replies. You are so helpful!

Thank you,
Avinash
  • December 03 2013
  • 1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Aw. man. The Seller is telling you that there is only ONE lender and ONE closing attorney that is acceptable to them. 
  • December 03 2013
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Avinash,

Please keep in mind that the builder's "incentive" is built into their margins.  So, you can choose the lender you feel most comfortable with and have your agent negotiate the seller's concessions or reduce the purchase price by that amount.  You may have to play hardball, but the builder wants to sell the units and should be flexible.

Best of luck,

Bryan
  • December 03 2013
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for John Foster
This is not an uncommon occurance and is an item that is negotiated at the time the contracct is signed.  If you are only a couple of weeks away from closing this is pretty late in the process to make a change.  I represented a buyer that just put a home under contract with Ryland.  In that community their incentive was $5000 in closing costs paid by the seller if you used their mortage company - there sales rep said you can use any lender you want but if you want the 5K in closing costs the buyer had to use their lender - it was spelled out in the contract.  At that point my Buyer had two options - one proceed and accept using their lender if you want the 5K in seller paid closing costs or get up and leave and buy a different home.  In order to get the best deal you have to be willing to walk away - it helps if you have a few homes that you like equally.  Unfortunately - in this market of low inventory that is not the case - so my Buyer decided to proceed.  I think he is happy he did. 

Good luck in your new home
  • December 03 2013
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

If a preferred lender is used, it is written in the purchase agreement, closing in a few weeks is late to be changing a lender, not that it can not be done, however, if the agreement was written and signed with preferred lender and some type of closing costs benefit in the wording, the seller is not obligated to change the offer if you decide to go with a different lender.
  • December 03 2013
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

I don't know how they can force you to use someone, but if that's accurate they're not allowed to do that.

  • December 03 2013
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

I just answered your post on the other site - but will here as well. A few things - 

1. Builders often have the same closing attorney handle closings as they are familiar with the community and the individual parcels. They can replicate the steps, makes it easy and clean. 

2. Closing offices often have their own preferred title companies - again usually out of convenience. Of course they are compensated so read into that what you will. 

3. Typically if you use a "preferred lender" you get closing costs; if not, you don't. That is likely in the contract. 

4. At some point, you signed the contract - anything done now modifies that and requires agreement by all parties. So define "being forced"....if that's what you signed, you aren't forced. If you now want to change and the builder doesn't, you're not being forced - you are just being expected to honor what you agreed to. 

New construction contracts are written to benefit the builder and provide consistency FOR THEM. Unless they agree, changes after that bullet is out don't happen. 

So back to that opening line "I signed a contract...."
  • December 03 2013
  • 1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Why not use your 3rd party attorney they are offering you? Let him/her contact mr builder. Builders like to use their favorite people because they good service and maybe some kickbacks from them.
  • December 03 2013
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.