Out of line contacting lender?

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Out of line contacting lender?

I am a licensed Realtor. I represent seller. Received offer subject to buyer obtaining financing throughspecific lender. I contacted lender to assess odds. Am I out of line. Buyer is livid

Asked on May 9, 2009 under Real Estate Law, Iowa

Answers:

B. B., Member, New Jersey Bar / FreeAdvice Contributing Attorney

Answered 12 years ago | Contributor

I'm not an Iowa lawyer, and to be certain you should talk to someone licensed in your state. One place you can find an attorney in your area is our website, http://attorneypages.com

There doesn't appear to be anything in the statute or regulations that makes your contact with the buyer's lender illegal.  Obviously, the buyer thinks that, at the very least, you were guilty of not minding your own business.

I understand that you want to be able to advise your client, on whether or not to accept this offer.  In some states, there is a limited time after a contract is signed, when either side can have their lawyer cancel the deal without needing a reason and without penalty.  If that is true in Iowa, you should let your client's lawyer handle questions such as this (whether it's a good idea to risk the buyer not getting the loan), after the contract is signed.  Otherwise, it might be best to have your clients talk to their lawyer about these sorts of things before signing, and limit your own advice to whether the price is good enough.  The question doesn't seem to be legal or not legal, but whether your involvement risks killing the deal.

J.M.A., Member in Good Standing of the Connecticut Bar / FreeAdvice Contributing Attorney

Answered 12 years ago | Contributor

Your question is not a legal question but rather business judgment question as you point out.  Usually people consider banking and lending to have a degree of confidentiality.  By you contacting the lender you are basically inquiring into the buyer's financial position as far they are concerned - sort of like asking what you made last year.  I know that lenders do not generally give out this info to seller's agents but the fact that you called comes across as aggressive and demeaning.  Dont you usually wait to recieve an approval letter from the lender?  In any event, i think it was a little aggressive but i completely understand why you did it.  You did not do anything illegal so you shouldnt have to worry about your license being in jeopardy.


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