How do I go about making an anonymous offer/purchase through a proxy to an owner who may not otherwise be willing to sell to me personally?

Asked by Krobinson, Draper, UT Tue Jul 5, 2011

Our association has had a long running dispute with an owner in our complex. I would like to make an offer to purchase his unit (I believe he may be willing to sell) but am not sure he would accept an offer from me if he was aware I was the purchaser.

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Kristopher F…, Agent, Salt Lake City, UT
Tue Jul 5, 2011
you've got me pulling out my books... I was shooting from the hip and memory earlier but here is supporting documentation...

There is a pre-written supplementary clause to our "addendum to real estate purchase contract" that when selected pre-populates the addenda with the following language...


The Buyer is acting on behalf of an undisclosed purchaser. The Buyer [ ] does [ ] does not have written authorization from the undisclosed purchaser to make this offer to purchase on the terms and conditions stated. If the Buyer is acting without the written authorization of the undisclosed purchaser as represented above, the Buyer will be personally liable to the Seller under the terms of this Agreement.}

According to my state text book in the "Broker Agency" chapter, section 4, under "Types of Principles" there are three definitions. A) Fully Disclosed: The customer knows there is both an agent and principle, and knows the identity of both. B) Partially Disclosed: The customer knows there is an agent and who the agent is. The customer also knows there is a principle but doesn't know the identity of the principle. With proper disclosure this is legal. C) Undisclosed: The agent indicates that he/she is the principle, even though he/she is acting as an agent for someone else. (this bullet offered lengthy details but essentially stated that if collusion between the true principle and agent was proven it would be considered illegal and grounds for the agent's license revocation.)

So bullets B & C made me look to section 3 of the same chapter to define how the agent can "Legally" represent the anonymous principle and property disclose... In this section there were 4 definitions of "Agents or Agency Relationships" A) Specific or Special Agency B) General Agency C) Universal Agency D) Power of Attorney. I wont try to insert the full definitions here but each paragraph offered what I would interpret as the principle granting the agent "Power of Attorney" or "Specific Power of Attorney" thereby giving the agent authority to both disclose to the seller/customer via the above language and the existence of the power of attorney and to negotiate the purchase of real property without the seller knowing the identity of the principle.

I recall my instructor using The Walt Disney Company as an example, if TWDC was looking for a large piece of land in Florida for a new amusement park and the owner of a suitable/desired parcel knew the buyer was Walt Disney Co. they would likely hold out for a very high price and unfavorable terms. The sellers knowledge of the principle's identity would be a detriment to the principle's negotiating position. But if the seller only knew that a qualified buyer was interested in the swamp land and was not privy to exactly who the buyer was or how the land would be improved the principle would then be able to purchase at a "Fair" price. Or without other interference.

Now I must admit, using this technique for one small town-home purchase may not be necessary but it is a "Legal Option" if executed properly.

As far as being put in practice in today's tight lending climate by using a mortgage to complete the purchase may also find some other static but in overall theory, my memory did serve me well.

The buyers question was if or how to use a proxy, I immediately thought of straw buyers but I guess one definition of an agent with power of attorney is a proxy. So I hope this brings more clarity to my earlier remarks.

I enjoyed this little challenge, as I do every day's little challenges. Surviving in today's market is not is not for the timid. I hope that the audience for this post enjoyed it too.

I welcome any comments, please reply to this message or directly anytime.

Kristopher Furrow, REALTOR®
-Associate Broker

Windermere Real Estate - UTAH
Salt Lake City and Park City
2348 South Foothill Drive
Salt Lake City Utah, 84109
Direct: 801.999.8679
Office: 801.485.3151
Fax: 801.485.3152
2 votes
raymond.woo, Home Buyer, Draper, UT
Tue Jul 30, 2013
0 votes
Justin Robins, Agent, Utah State, UT
Mon Jun 10, 2013
I would suggest using an agent to make the offer and have the agent write it up as a un-disclosed purchaser. That would probably be the best way in my opinion.

Justin Robins
Cornerstone Real Estate
Web Reference:
0 votes
allan erps,A…, Agent, Pearl River, NY
Thu May 16, 2013
Answers are very good here but question is 2 years old... How did you fare is my question?
0 votes
Buckg95, Home Buyer, Draper, UT
Thu May 16, 2013
Have the current homeowner 'rubbed out' so you can purchase the home unimpeded.
0 votes
Dp2, , Virginia
Wed Jul 6, 2011
From an investor's perspective, the 3 most straight-forward ways of doing this is via 1) an assignment of an option, 2) an assignment of a P&S, or 3) a double close. That proxy (or the B buyer in investor parlance) is also a primary in the deal.

Please feel free to drop me a line.
0 votes
Shane Milne, Mortgage Broker Or Lender, South Jordan, UT
Wed Jul 6, 2011
Great information Kris - I don't think Krobinson could have asked for a better explanation, and thank you for those details as well, thumbs up for you. I am interested to know what my underwriting staff says about this, if any bank should be familiar I'd think it'd be my own since they've been around for 100+ years out by Hill AFB. If I get feedback I'll let you know.
0 votes
Mack McCoy, Agent, Seattle, WA
Tue Jul 5, 2011
How about you back away from this situation, and let somebody else buy the property?
0 votes
Shane Milne, Mortgage Broker Or Lender, South Jordan, UT
Tue Jul 5, 2011
Hi Kristopher - that is very interesting and I've never heard of it (even though my company is based in Draper, UT, First National Bank of Layton, I am out in California) - how do you find that lenders react to not seeing a buyer's name listed on the purchase agreement? Or is there an addendum that discloses the buyers name after the contract is accepted? Or do you not really do that type of purchase if traditional financing is involved?
0 votes
Kristopher F…, Agent, Salt Lake City, UT
Tue Jul 5, 2011
Hi Krobinson,
There is a clause that is often used called "Undisclosed Buyer" where your offer will be kept anonymous throughout the transaction and would not require such actions of using a straw buyer.

It is possible that the seller may not be as receptiveto an anonymous offer.

If you would like more assistance feel free to call anytime.

Kristopher Furrow
Associate Broker
Windermere Real Estate
0 votes
Marge Bennett, Agent, Fort Myers, FL
Tue Jul 5, 2011
you could form an LLC. Or someone else could write an offer that allowed the contract to be assumed.
0 votes
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