To all the agents in the house,
In the last OpenHouse, I asked: Why it is okay to not sell a home to the highest bidder? A few agents took issue with the question!
"OMG! The government needs to back off," wrote one Michigan real estate agent. "A homeowner should be able to sell their home to anyone for any price they want without any repercussions. This is the USA. Are we no longer able to buy or sell what we want from whoever we choose? Wake up!"
Sure, this is partly true. A homeowner, and their agent, can do whatever as long as it conforms with the Fair Housing Act, the Realtor Code of Ethics (for the agent) and other laws. But my question was less what is legal, and more what can practically and ethically guide agents. Or, as Peter A. Mohylsky, a broker at BRIX Realty in Oklahoma City, Oklahoma, put it, "I wish we could standardize the real estate industry such that we are held in a higher regard by the consumer. Unfortunately, that might be impossible."
A few of you provided a priority list, noting factors like timing flexibility, the size of a down payment, loan terms, and the need for appraisal.
"Earnest money, seller's asset, settlement data, mortgage/appraisal contingency, inspections, home sale contingencies," wrote K.J. Fry of RE/MAX in Wyomissing, Pennsylvania, regarding what factors he considers. "Many, many times I've had sellers take less money, because the other terms were more agreeable to them."
One point of debate is whether it's okay to reject a buyer because they have a Federal Housing Administration or Veterans' Affairs loan. These applicants are not protected under the Fair Housing Act, leaving it up to the agent's discretion.
"Is it prejudicial for a seller not to accept an FHA offer over a conventional loan when FHA comes with additional inspections?" Fry wrote. "Decidedly not!"
But one mortgage lender who chimed in believes agents have an obligation to work with such buyers.
"Some sellers and listing agents will not even consider FHA/VA loans as reflected in listing agent remarks regarding the sale of the home," said Tony Humphrey, vice president of mortgage lending at Mortgage Center in Las Vegas, Nevada. "I don't believe you can get any more discriminatory than that, to flat out reject a loan because it is FHA/VA."
Agents, what more do you think about standards for choosing a buyer? What, if any, bright line rules guide your decisions?
Sincerely,
Matthew Blake
Senior Real Estate Reporter
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