Profile picture for andymichelleh

Realtor ethics question?

We are currently trying to buy the house we are living in as tenants. We calculated how much we can afford, applied for a mortgage, were pre-approved, and made an offer. The offer was rejected a few hours later. I just found out that before the seller rejected the offer, the listing agent called our mortgage broker, said she was OUR realtor, and asked if our pre-approval amount could be raised if needed. Obviously, I am livid and while I'm certain this is not ethical I'm wondering what the legalities are and what my next step should be.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
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.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
March 28 - Fairfax
We think we've answered this question for you!
  • Be a Good Neighbor. Be respectful and on-topic. No spam or self-promotion! See our Good Neighbor Policy.
 
 

Answers (7)

As a Loan Officer in Northern VA, i get calls all the time.  I never comment on how much they can afford.  I always comment on the credit worthiness of the buyer/borrower, how far along are we are in the Approval Porcess and how soon they can close.  Always with the borrowers written authorization usually via email.  my 2 cents. 
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
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.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
March 29
Profile picture for Pasadenan
Credit worthiness is entirely different than maximum that can be borrowed.  Though agents tend to call loan officers to try to extract this kind of info, the loan officer has no business giving out that info to ANYONE without the specific consent of the borrower.

I'm thinking it would be a good idea to find a different loan officer.  Or maybe just cancel the offer due to the "bad faith" of the selling party.

On the other hand.... fair market value is not determined by what someone is "able" to pay, or even what a specific party is "willing" to pay, but what "someone" will pay; and if the offer was not fair market value, why would the seller choose one party, even if a long term tenant, if they can easily sell to someone else for substantially more?

And if there is already a relationship between the tenant and owners, why get agents involved in the first place?  Unless to establish what fair market value really is, and to make sure paperwork is completed correctly?

Sounds like the seller isn't interested in selling at a discount regardless.  Thus it is a moot point what the listing agent and loan officer did.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
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.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
March 28
Mack, if I'm representing the buyer and we think there may be multiple offers, to reassure the seller that my client is financially able to close, I ask my buyer to sign a cover letter for the offer package authorizing the seller or listing agent to discuss the buyer's credit-worthiness with the lender.  Copy of that letter is emailed to the lender so the lender knows the seller or listing agent may be calling.  I've also received similar letters from buyer agents when I've represented the seller. As a listing agent, if all I got from a buyer was an approval letter, I wouldn't consider that to be permission for me to call the lender to discuss the buyer's finances.  I'm interested in knowing the experience of other agents, particularly in Virginia.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
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.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
March 28
That's interesting, Chas. It seems to me that nothing in the contract is binding until you have mutual acceptance.

To my mind, once the buyer gives the seller or listing agent a copy of their preapproval letter, then they have a right to talk to the loan officer. Different in VA?
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
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.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
March 28
Clearly, if the listing agent misrepresented her identity, that is an ethical violation.  However, the listing agent calling your lender for more information about your credit-worthiness would be permissible if in the offer you gave the seller (and seller's representative) authority to contact your lender.  That is standard language in real estate offers that I have written on behalf of buyers (and received on behalf of sellers). 
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
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.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
March 28

I would ask my mortgage broker to document the conversation with the listing agent. Once I was completely out of the transaction, I would take this documentation to the local Board, and my complaint would be Article 1, the agent's ethical duty to treat all parties honestly. I would also file a complaint with the state licensing authority.

The issue, of course, isn't that the listing agent asked if you could borrow more. It was the lying about her agency relationship.

All the best,

  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
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.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
March 28
I would be upset too, that loan officer had no business talking about your loan to anyone.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
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.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
March 28
 
Related Questions
Real Estate Agents near Fairfax, VA
Profile picture for Pinyo Bhulipongsanon
Latest answer by Pinyo Bhulipongsanon
July 05 | 5 answers
  • Asked by zuser20140518091217587
  • In Investing
  • May 20
Seller Pays Difference in My offer and what the Bank Wants
Profile picture for Ron Leffler
Latest answer by Ron Leffler
July 01 | 4 answers
How do I get in touch with someone at Zillow?
Profile picture for Tiffany Jacobs
Latest answer by Tiffany Jacobs
June 06 | 6 answers
How can I get properties going on auction in northern VA?
Profile picture for Kelly Smith
Latest answer by Kelly Smith
May 20 | 2 answers
Contract Ratification/Termination
Profile picture for James Ryan
Latest answer by James Ryan
April 19 | 4 answers
Mortgage Rates
 
Be A Good Neighbor

Zillow Advice depends on each member to keep it a safe, fun, and positive place. If you see abuse, flag it. More on our Good Neighbor Policy.

Homes for Sale
  1. 1018 Desale St SW, Vienna, VA Home For Sale
    1018 Desale St SW, Vienna, VA 22180

     For Sale: $599,900

    • Beds: 4
    • Sqft: 1740
    • Baths: 3.0
    • Lot: 15248
  2. 2972 Franciscan Ln, Fairfax, VA Home For Sale
    2972 Franciscan Ln, Fairfax, VA 22031

     For Sale: $625,000

    • Beds: 3
    • Sqft: 1944
    • Baths: 4.0
    • Lot: 2000
  3. 3208 Chichester Ln, Fairfax, VA Home For Sale
    3208 Chichester Ln, Fairfax, VA 22031

     For Sale: $889,000

    • Beds: 4
    • Sqft: 3225
    • Baths: 4.0
    • Lot: 28121