Can A Seller Force You To Use Their Lender?

Dear Phyllis,
We have been looking at homes for several months and have already made three offers. Two of these required us to be preapproved by the seller’s lender. As we are already preapproved with a nationwide bank, I really do not see the reason for this. With our offer we submitted proof of funds and a preapproval letter with our FICO score. Identity theft is a concern, and I am not comfortable submitting my personal information and having credit pulled for additional lenders almost every time I make an offer. Can a seller force you to use their lender? Jim

Dear Jim,
A seller cannot force you to close with their lender. I understand how stressful the offer process has become. There are often offer deadlines, endless offer instructions and limited showing times.
Keep in mind it is likely the listing agent who is recommending to the seller that this be done. Some listing agents have a set of rules when submitting offers. Since there is a lot of competition for homes, it is recommended that you cooperate as much as possible. You want to be the buyer with the accepted offer.
There are many critical participants in a real estate transaction and an inexperienced lender can create havoc for both buyer and seller. I have seen instances where the listing agent has advised the seller to insist that the buyer double app (application) with their choice of lender. However, they can’t require you to close with their lender. Double apps are sometimes required when the buyer’s down payment is low or there is some legitimate concern.
So perhaps instead of each new lender pulling credit, you can show a copy of your credit report to the seller’s lender. And rather than providing all your income information, have your lender contact the seller’s lender. They can advise them that your income, credit, and down payment information has been reviewed and verified.
Anytime you are emailing confidential information, be sure to x out your social security number and account numbers.

Best of luck to you on your home search!