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Buying with a proxy

Posted by nornster (My Page) on
Thu, Sep 11, 08 at 13:37

A poster here recently asked about buying his house under another name, due to privacy concerns about public records. My question is a little different. Our neighbors are putting their house up for sell soon, and its unique situation (related to property lines and variances) would keep most people from wanting to pay top dollar for it. My relatives might be interested in buying the property, and not only would they not mind this unique situation, there would be advantages to us if they owned the adjoining property. (I'm being purposefully a little vague, because you never know who's reading this board!)

So, essentially, this property is worth more to me and my relatives than it would be to the average buyer, and my neighbors know that, of course. So if my relatives were to bid on the place, the neighbors might try to get the most money out of them as possible, since they'd be pretty motivated. Is there a way for them to put in a bid as an "anonymous buyer"? People don't really use buyer's agents around here - when they're interested in a house, they call up the agent on the sign and he/she shows them around, and they put in a bid through that agent, knowing full well that the agent works for the seller. This is a small-town environment, and between us and the other relatives who have bought nearby, we have good relationships with several area realtors, although none has ever been working "for us." There are also lawyers in town that we know and trust.

I'd really like my relatives to buy this place, due to these unnamed advantages to us, but I wouldn't want them to pay more than they had to. And, they should consider the resell angle, too. If they bought this house for what it's worth to them, and then tried to sell it later, it wouldn't be worth nearly as much to someone not closely related to us. A family around here bought waterfront property, and then their adult children bought the back lot behind them, knowing that they could cut through their parents' property to get to the water. Now the adult children are trying to sell the place, and they're having trouble finding someone who will pay what they want, since it won't be the new owners' parents living next door!


Follow-Up Postings:

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RE: Buying with a proxy

Maybe your relatives could just try walking away if the seller wants more than they are willing pay?


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RE: Buying with a proxy

Go thru a real estate lawyer.
Kathy G in MI


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RE: Buying with a proxy

I'm pretty sure you could get a lawyer to act for you in this matter (though you'd have to pay a fee for that). However, if the true purchaser couldn't openly contract in the normal way then I think you'd have unusual complications, and maybe it would wind up more costly than otherwise.

For instance if your relatives were purchasing with a mortgage, the mortgage company would, of course, need to know the name of the borrower. That would be very hard to conceal (effectively) from the other parties to the transaction once the bank was involved.

And if your relatives wanted to visit or inspect the property prior to negotiations or closing, then their identities would become known.

I think the most you could easily do was negotiate the contract anonymously,though I don't know that that would get them the lowest price because the sellers might imagine that Tom Cruise was the true buyer and figure they could soak the movie star. If your relatives did get to contract without being named, then they could reveal themselves, but I think it might sour the tone of the relationship with the seller, and possibly poison any further negotiations down the line. And there are often further negotiations after contract but before closing.

It would seem simpler to just be upfront from the beginning. Because the particulars of this property would seem less desirable to uninvolved buyers, there's no need for your relatives to pay a premium. Since if your relatives aren't willing to do so, then the sellers aren't going to get more from a less interested buyer.

However, I once dealt with a similar (just reading between the lines of your description) situation and I had a seller who couldn't work that through in her head. She kept thinking that she could get more from us because buying this particular piece of land would be better for us than for anybody else. Um, nope; we made a full appraisal price, cash offer that she rejected. And it hasn't yet sold 4 years later.

Your relatives will have to decide if the special conditions (those unique to their situation) make enough of a difference for them to want to purchase this particular property at the market price that others might be likely to pay. They can't really expect to get it more cheaply than others, but they shouldn't have to pay extra either. Unless, of course they are under some kind of unusual pressure to cure a defect, or obtain room for expansion or installations like septics or wells. In those cases, sellers sometimes do call the shots and there's nothing to be done.

Molly~


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RE: Buying with a proxy

Molly, thanks for the perspective that "the sellers aren't going to get more from a less interested buyer." I hadn't thought of it that way. However, it's entirely possible that it will end up like your situation - the sellers will want more from my relatives than anyone else. That's why I was wondering if it would be possible to negiotiate the contract anonymously. However, I think you might be right that it would be best to just be upfront. I don't think the sellers might imagine it's secretly Tom Cruise :-) ; they'll probably figure that it's my relatives, anyway.

Thanks for your thoughts.


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RE: Buying with a proxy

So, essentially, this property is worth more to me and my relatives than it would be to the average buyer, and my neighbors know that, of course. So if my relatives were to bid on the place, the neighbors might try to get the most money out of them as possible, since they'd be pretty motivated. Is there a way for them to put in a bid as an "anonymous buyer"?

When I 1st came to this board I was in a similar situation. My dad built a house a few blocks from me, then a week before closing was diagnosed with a cancer that gave him a 14% chance of survival. My mother made no secret of wanting to sell the house if he passed, my dad told her she can sell us the house for fair market value since my hubby & I put a lot of love, sweat & our own money into the house when he was down.

My dad passed, while I was in the hospital a few months later having back surgery my mother put the house up, never asking if we were interested. We immediately got an agent & asked the same question, could we send an offer anonymously. The answer was no.

So, we put in an offer for what we thought was fair, they countered like $1,000 less then they were asking, which was $25k more then they paid in a declining market. They (one sister was running the show) wouldn't even negotiate with us. Eventually my mother said she'd sell us the house since no one was interested (after 5 months) but just as the house was going off of contract she got an offer and instead of calling our agent to try to get a bidding war, settled for $10k more then we offered. In the end she got less then what we offered after having to pay the agent. Nothing like cutting off your nose to spite your face. I was my dad's favorite, also his care taker while he was sick, they were jealous.

My question is a little different. Our neighbors are putting their house up for sell soon, and its unique situation (related to property lines and variances) would keep most people from wanting to pay top dollar for it. My relatives might be interested in buying the property, and not only would they not mind this unique situation, there would be advantages to us if they owned the adjoining property.

What kind of market are you in? Chances are no one is going to buy the house to begin with. I wouldn't rush to throw an offer in. That was what we did.


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No anonymous offer?

Hi, Roselvr, I remember when you came to the board, I'm sorry it worked out that way for you. I'm curious - what reason did the realtor give you for not being able to put in an anonymous bid?

In this market, I think that the sellers will ask for more than my relatives are willing to pay, but no one else will want to pay that much, either. The house will likely sit - around here, many places have been for sale for two or three years, while the sellers hold out for the jackpot.


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