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How does one make an offer without giving up ID?


By Patrick   Follow   Wed, 27 Jul 2011, 8:06am PDT   7,165 views   74 comments   Watch (0)   Share   Quote   Permalink   Like   Dislike  

I have a reader who wants to know how to make an anonymous offer on a house.

How would you do that? Since ownership info is sometimes in the name of a trust or corporation, I expect offers can be made in their name as well. But maybe that even gives away too much -- like that you have the wherewithal to set up a trust.

Any other advice on how to make an anonymous offer?

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Misstrial   befriend   ignore   Thu, 28 Jul 2011, 6:34am PDT   Share   Quote   Like   Dislike     Comment 35

robertoaribas says

A contract for real estate requires the names of the parties, and the legal description of the property, as well as to be in writing.

so NO you cannot have an anonymous contract. Refer to the statute of frauds.

Not entirely true. An attorney who buys property for a client would certainly be named on any contract, however the true owner's identity is not revealed.

Some celebrities and wealthy persons buy property through an attorney.

This is one way to engage in asset protection since no where in public records does it show that you own any real estate.

I plan on doing this.

Perfectly legal and not a violation of any law, including the statute of frauds which simply is that "all agreements involving land must be in writing."

~Misstrial

Michinaga   befriend   ignore   Thu, 28 Jul 2011, 7:03am PDT   Share   Quote   Like   Dislike     Comment 36

I agree with the other posters insisting that it's only the contract, not the offer, where both parties must be named.

This was outside the US, but I bought my home without the owner knowing my name or anything about me. That's what the real estate agent was for: he submitted my offer to the seller. An amount of money only. The seller accepted, and then eventually learned who I was, but not before both parties had agreed to buy and sell.

eastbaydude   befriend   ignore   Thu, 28 Jul 2011, 7:57am PDT   Share   Quote   Like   Dislike     Comment 37

thomas.wong1986 says

globe33 says

A letter of pre-approval and proof of down-payment is a necessity when submitting an offer? Correct? At least, that's the case here in the bay area where it is still a pretty competitive market.

Flat out .. NO! And NO that was not the case before the bubble.

Pre-approval is often used by REA to see how much more they can extract from you.

I guess you haven't been house-shopping or have not made any offers in the past 2 years.

Without supporting documentation (pre-approve letters/finance statements) and an offer contract, your "verbal" offer won't be taken seriously.

In fact, some REOs require specific pre-approve letters to be even considered. E.G. BoFA requires a pre-approve from their own bank. You can do cash or use another lender at close of escrow but even to be considered, you need to be pre-qual by BoFA.

You are simply wasting their time and yours. Anyone can make an offer but without a contract, there is no re-course and the seller can get tied up by fake buyers. If I was a seller, I would want the same guarantees.

How many times has anyone put up an item for sale on craigslists and had tons of flakers called or people who made promises for you to hold their items. I've had tire-kickers on cars I've been trying to sell. No need to waste time on rif-raffs.

corntrollio   befriend   ignore   Thu, 28 Jul 2011, 9:32am PDT   Share   Quote   Like   Dislike     Comment 38

REpro says

I don't see a problem as long as your offer is ALL CASH. In this situation you can make an offer as a Corp., Trust, LLC and whatever. Bank or individual seller then knew, they are dealing with an investor(s).

Yeah, all cash makes anything like this a lot easier. If you have a trust or LLC, you generally still have to give a personal guarantee to the bankster if you need a loan if it's a shell company.

thomas.wong1986   befriend   ignore   Thu, 28 Jul 2011, 1:18pm PDT   Share   Quote   Like   Dislike     Comment 39

eastbaydude says

Without supporting documentation (pre-approve letters/finance statements) and an offer contract, your "verbal" offer won't be taken seriously.

All those documents are between the buyer and bank/lender not the seller or their REA. You dont disclose how much credit you can take out to seller or agents. Thats Insane!

"oh look he has $400,000 credit line, and wants to buy a $300,000 home... plenty of room to play with that!"

Before the bubble, when i bought, there was no such practice.

eastbaydude   befriend   ignore   Fri, 29 Jul 2011, 7:54am PDT   Share   Quote   Like   Dislike     Comment 40

thomas.wong1986 says

eastbaydude says

Without supporting documentation (pre-approve letters/finance statements) and an offer contract, your "verbal" offer won't be taken seriously.

All those documents are between the buyer and bank/lender not the seller or their REA. You dont disclose how much credit you can take out to seller or agents. Thats Insane!

"oh look he has $400,000 credit line, and wants to buy a $300,000 home... plenty of room to play with that!"

Before the bubble, when i bought, there was no such practice.

Once again, you are wrong.

If you want to make an offer on ANY BoFA REO, you need a pre-approval from them.

http://realestatecenter.bankofamerica.com/pages/map-search

Here is their offer instruction.
http://www.27ross.info/_PropertySiteData/_Documents/421_BofA_REO_Offer_Procedures_and_Sample_Addendums_07-01-10.pdf

Example of a MLS listing showing what is required.

http://www.century21town-country.com/Property/MI/48044/Macomb/20490_ST_MARTINS

thomas.wong1986   befriend   ignore   Fri, 29 Jul 2011, 8:01am PDT   Share   Quote   Like   Dislike     Comment 41

eastbaydude says

Once again, you are wrong.

Read again...what I said:

"All those documents are between the buyer and bank/lender not the seller or their REA."

thomas.wong1986   befriend   ignore   Fri, 29 Jul 2011, 8:45am PDT   Share   Quote   Like   Dislike     Comment 42

robertoaribas says

Not a common practice before the bubble years. But normal practice is lost these day. Only your bank/lender should have access to that material not a REA. Common sense anyone ?

bubblesburst   befriend   ignore   Fri, 29 Jul 2011, 11:20am PDT   Share   Quote   Like   Dislike     Comment 43

Patrick says

The price of the house will indeed go up for you personally if the seller thinks you can pay more.

I totally agree with you Patrick. It's just human nature if someone thinks someone else has a lot of money they will hold out for more money. I've done the same thing when I've sold real estate I have owned. Apartments, houses, and even land. If I know the buyer has deep pockets, I naturally held out for more. I don't think there is anything necessarily wrong with that.

But of course you just have to set a limit to what you will pay and stick to it. I try not to get too emotional when buying real estate and set a limit to how high I will go. Sure, I've lost plenty of great properties but my attitude is there will always be something else.

B.A.C.A.H.   befriend   ignore   Fri, 29 Jul 2011, 4:02pm PDT   Share   Quote   Like   Dislike     Comment 44

Professor,
thank you for sharing. You are so smart and savvy, thanks for lecturing us on how smart and savvy that you are.
I wonder why when you are so well ensconced in Phoenix you feel the need to spend so much time on a Bay Area focused blog sharing to Bay Areans about how to be so smart and so savvy (maybe Hip and Cool, too?).
I've been privileged to live my whole life in the Bay Area where the Hip and Cool come to from all over the USA and all over the world teach to podunk local like me "like it is". But it's really taken it to a hol'nuva'level to be privileged to have a College Professor "come over" here in the virtual world to do that.

eastbaydude   befriend   ignore   Sat, 30 Jul 2011, 12:25am PDT   Share   Quote   Like   Dislike     Comment 45

thomas.wong1986 says

Not a common practice before the bubble years. But normal practice is lost these day. Only your bank/lender should have access to that material not a REA. Common sense anyone ?

Roberto gave the correct reply. No seller will take an offer without proof of funds or proof of the buyer's ability to pay.

I also want to comment on this other statement,

"oh look he has $400,000 credit line, and wants to buy a $300,000 home... plenty of room to play with that!"

The credit line doesn't matter. Sellers can't jack the price to meet the credit line because banks now only lend to the appraised amount. If the house in question is appraised at only $275,000. No bank will even lend the $300K. Seller will have to drop their price down to get any finance buyers.

Lastly, about Mr Wong's "common practice" statement. Well, I would think it is common sense a seller takes offers from only qualified buyers. Qualified as in a buyer who has the proof of funds or guarantee of financing. Any joe on the street can come in an make an offer and walk away. The seller will be left holding the bag in a market where buyers are scarce. If I was a competing seller, I'd just show up and make stupid and crazy offers like 550K on that 300K house with no intention to buy. The qualified buyers' offers would not be looked at (under thomas.wong's scenario). I'd tie up and waste the seller's time and make sure all the qualified buyers go elsewhere (hint: look at my house instead).
Heck, I'd do that to all the houses in the neighborhood and only mine would get serious offers.

FortWayne   befriend   ignore   Sat, 30 Jul 2011, 1:50am PDT   Share   Quote   Like   Dislike     Comment 46

go through a third party that will make it clear to the seller that you prefer to stay anonymous. You can than use multiple layer LLC to keep anonymity.

It can all be tracked down, but it's a lot of hastle. Most people won't care to do so. I would imagine most people would be happy someone is willing to buy their balloon finally.

thomas.wong1986   befriend   ignore   Sat, 30 Jul 2011, 5:23am PDT   Share   Quote   Like   Dislike     Comment 47

eastbaydude says

Qualified as in a buyer who has the proof of funds or guarantee of financing.

Now look back and see how many recent buyers during the past bubble years forged all the financial documents and incomes. All looked good on paper, but at the end were unable to actually pay for the home. They were the winning bidders.

thomas.wong1986   befriend   ignore   Sat, 30 Jul 2011, 5:32am PDT   Share   Quote   Like   Dislike     Comment 48

eastbaydude says

Sellers can't jack the price to meet the credit line because banks now only lend to the appraised amount.

The Appraised amounts were jacked up as many appraisers would attest to. And that pressure came from REA. They threw a red flag very early in the bubble, but no one listened.

http://www.appraiserspetition.com/

The concern of this petition has to do with our "independent judgment" in performing real estate appraisals. We, the undersigned, represent a large number of licensed and certified real estate appraisers in the United States, who seek your assistance in solving a problem facing us on a daily basis. Lenders (meaning any and all of the following: banks, savings and loans, mortgage brokers, credit unions and loan officers in general; not to mention real estate agents) have individuals within their ranks, who, as a normal course of business, apply pressure on appraisers to hit or exceed a predetermined value.

This pressure comes in many forms and includes the following:

the withholding of business if we refuse to inflate values,
the withholding of business if we refuse to guarantee a predetermined value,
the withholding of business if we refuse to ignore deficiencies in the property,
refusing to pay for an appraisal that does not give them what they want,
black listing honest appraisers in order to use "rubber stamp" appraisers, etc.

thomas.wong1986   befriend   ignore   Sat, 30 Jul 2011, 5:39am PDT   Share   Quote   Like   Dislike     Comment 49

eastbaydude says

Any joe on the street can come in an make an offer and walk away. The seller will be left holding the bag in a market where buyers are scarce. If I was a competing seller, I'd just show up and make stupid and crazy offers like 550K on that 300K house with no intention to buy.

As was discussed on Pnet many times over, all you need is an open bidding process where all the interested parties, seller and buyers with their agent/lawyer are present on a given day (say weekend) and can make open verbal offers. An open auction if you will. You can have the final signed contract after the final offer accepted.

That will eliminate the riff raff and the fake (phantom) bidders.

B.A.C.A.H.   befriend   ignore   Sat, 30 Jul 2011, 3:08pm PDT   Share   Quote   Like   Dislike     Comment 50

Patrick is in the Bay Area. This website is focused mainly on the Bay Area. Many of those who post are in the Bay Area. Thomas Wong, like sybrib (me) are locals of the Bay Area.

Bay Areans are mostly busy with their lives in the Bay Area, and are not so pretentious as to claim to know what makes folks tick in Other Places like Phoenix or Chicago. They should be experts on their regions, because that's their regions and their expertise. But their regions are mostly irrelevant to Bay Areans except when it affects national politics.

You can lecture Bay Areans all you want from your podium at the community college in Phoenix, (or as a RealtorĀ® in Phoenix), - nobody doubts your savvy and knowledge about your world.

In Phoenix. At the community college; at the realty.

eastbaydude   befriend   ignore   Sat, 30 Jul 2011, 3:50pm PDT   Share   Quote   Like   Dislike     Comment 51

Sybrib says

Patrick is in the Bay Area. This website is focused mainly on the Bay Area. Many of those who post are in the Bay Area. Thomas Wong, like sybrib (me) are locals of the Bay Area.

Well, I'm from the Bay Area and I don't claim to be no expert but Thomas Wrong is wrong.
I've been looking to buy a house since January of 2011 in areas such as Concord, Martinez, Pleasant Hill so my experiences are very relevant
because everything I've mentions is status-quo current and topical in terms of what I've seen in my RE shopping experience.

Nobody accepts an offer without proof of funds. Nobody looks at an offer without an offer contract.
The fact of the matter is, Thomas is completely wrong. It isn't a matter of opinion. Just call up any listing agent for a BofA or a Wells Fargo REO and ask them what is their offer requirement. Plain and simple.

thomas.wong1986 says

The Appraised amounts were jacked up as many appraisers would attest to. And that pressure came from REA. They threw a red flag very early in the bubble, but no one listened.

Thomas Wrong keeps on bringing up what happen during the bubble years. My experiences are as of Feb-April 2011.

Appraisals in the last 6 months are completely opposite from what he is claiming. They're actually lower and more than often, lower than listing price. Real Estate agents are pulling their hairs because appraisals are lower.
I don't know what the new regulatory laws are but every house I've made an offer, the sellers get pissed off that the banks want an out-of-town appraiser due to recent regulatory laws.
Out-of-town appraisers who are unfamilar with the market are often appraising houses 15-30K less than listing price.

My point is, banks will not finance anything over appraised value. Period. So if a house is listed for 300K, I offer 275K, the appraisal comes in at 250. I have to come up with the 20k difference.
BofA, Chase, Wells Fargo will NOT lend over appraised amount.

This is why if you tracked any house you've been interested in, you'll see many houses in 2009-2010 sold for way less than their asking price. Thomas mades the argument, if the seller knows the credit line, they can somehow leverage that bargaining.
My point is no. This has caused many problems that I've articulatd before.

Too many people were over-bidding above listing price because they KNEW the sellers had to renogiate to match lower appraisals.
As of now, sellers have no-appraisals contigencies. If it comes in lower, that is the buyers problem and there was no exit clause.
Cash buyers don't have that problem but a finance buyer will. Many lenders want those exit-clauses. Some buyers can use that to their advantage (different topic).

Point is, many sellers want to know who the lender is. They also want to know if it is conventional 20% loan or FHA. I've been told 20% loans and cash offers always get first look. FHA gets toss aside or if the other offers fail.
So, as of 2011, sellers IN THE San Francisco "BAY AREA" want to know how the buyers will pay for the property.
This whole thing about a weekend secret auction thing w/ RE or Lawyers making random bids is ridiculous. Even REA who represent the buyer wants to know if the buyer is capable of completing the transaction.
Also. One thing to note. A pre-qualified letter from the lender is not the same thing as a pre-approval. With strict under-writing for 20% conventional loans, someone pre-qualified may not get the mortgage once it hits escrow.

Sellers also want to pre-screen the buyers and avoid a disqualification 45 days into the deal. Some sellers want to know if the buyer can come up with the appraisal difference or whether the finance buyer has enough to cover down and closing,etc....

eastbaydude   befriend   ignore   Sat, 30 Jul 2011, 4:00pm PDT   Share   Quote   Like   Dislike     Comment 52

thomas.wong1986 says

eastbaydude says

Qualified as in a buyer who has the proof of funds or guarantee of financing.

Now look back and see how many recent buyers during the past bubble years forged all the financial documents and incomes. All looked good on paper, but at the end were unable to actually pay for the home. They were the winning bidders.

Again, everything I said refers to the status-quo as of 2011. Underwriting is stricter for 20% conventional loans. I'm doing a conventional 15 or 30 year loan. I don't know how it works with FHA or anything else.

Again, my statement and question to you is when was the last time you were house shopping?

When I did my mortgage application process this April. The banks even asked me why I had a $60 cash ATM deposit in the month of February. Serious. They wanted to know where $60 came from. Kid's child-care? Why was I paying cash and not checks? What was I trying to hide from the month of March?

They even scrutinized why I had a 30K IRS tax refund. I had to show them 4 years of tax returns to show them how and why I got that refund.

Work overtime and have got a $10K bonus? Well, guess what, that bonus wasn't added to my income when they did my debt-income ratio calculations. A one year bonus is not calculated.

My company lease car? Well, the lease is in my name but I had to get my company accounting department to write a letter and show they make the payment so it wasn't calculated in my income ratio.

In fact, it was stricter and more detail then when I bought my first property in 1998.

thomas.wong1986   befriend   ignore   Sat, 30 Jul 2011, 4:08pm PDT   Share   Quote   Like   Dislike     Comment 53

eastbaydude says

The fact of the matter is, Thomas is completely wrong. It isn't a matter of opinion. Just call up any listing agent for a BofA or a Wells Fargo REO and ask them what is their offer requirement. Plain and simple

If you wish to discuss REO than do so, your dealing with a bank. The orginal question did not pertain to REOs. Good prudence in keeping your personal and financial information under control still stands. Then and today.

robertoaribas says

As for me, i live in this place called REALITY.

Look around Robert, REALITY in the RE market over the past 10-12 years has been broken.

thomas.wong1986   befriend   ignore   Sat, 30 Jul 2011, 4:12pm PDT   Share   Quote   Like   Dislike     Comment 54

eastbaydude says

When I did my mortgage application process this April. The banks even asked me why I had a $60 cash ATM deposit in the month of February. Serious. They wanted to know where $60 came from. Kid's child-care? Why was I paying cash and not checks? What was I trying to hide from the month of March?

And would you also disclose all this information to a seller and their REA, strangers you dont know ?

I bought back in the early 90s, and we are heading back to the same strict lending standards you speak of. No different what I went through. I also gave a pint of my own blood.

eastbaydude   befriend   ignore   Sat, 30 Jul 2011, 4:21pm PDT   Share   Quote   Like   Dislike     Comment 55

thomas.wong1986 says

And would you also disclose all this information to a seller and their REA, strangers you dont know ?

No, I was not referring to giving this type of detail info to the seller. They want to know if you have proof of funds for a down-payment, closing and your ability to get finance.
My point is sellers want qualified buyers.

I was replying to the fact you need to be qualified and the bank does a lot of the legwork for the sellers.
In my example, the lending institution is very strict and I was rebutting your assumptions that the status quo is laxed in terms of underwriting. It isn't.

A qualified buyer today is much more qualified than in 2005-2007.

A seller would probably want to know who pre-approved. They pick a 20% convention from Wells Fargo over a FHA from some New Jersey chop-shop mortgage broker.

thomas.wong1986   befriend   ignore   Sat, 30 Jul 2011, 4:23pm PDT   Share   Quote   Like   Dislike     Comment 56

eastbaydude says

Appraisals in the last 6 months are completely opposite from what he is claiming. They're actually lower and more than often, lower than listing price. Real Estate agents are pulling their hairs because appraisals are lower.
I don't know what the new regulatory laws are but every house I've made an offer, the sellers get pissed off that the banks want an out-of-town appraiser due to recent regulatory laws.
Out-of-town appraisers who are unfamilar with the market are often appraising houses 15-30K less than listing price.

That is totally funny! Dont you just hate how the market goes into a era of "corrections". Have fun! your paying less, and saving more cash today and into the future.

thomas.wong1986   befriend   ignore   Sat, 30 Jul 2011, 4:31pm PDT   Share   Quote   Like   Dislike     Comment 57

eastbaydude says

No, I was not referring to giving this type of detail info to the seller. They want to know if you have proof of funds for a down-payment, closing and your ability to get finance.
My point is sellers want qualified buyers.

Sure, you tell them verbally "YES"!. And if that isnt good enough tell them to go fuck themself.

thomas.wong1986   befriend   ignore   Sat, 30 Jul 2011, 4:32pm PDT   Share   Quote   Like   Dislike     Comment 58

eastbaydude says

In my example, the lending institution is very strict and I was rebutting your assumptions that the status quo is laxed in terms of underwriting. It isn't.

I never stated lending was laxed. My point is regarding privacy.

eastbaydude   befriend   ignore   Sat, 30 Jul 2011, 4:33pm PDT   Share   Quote   Like   Dislike     Comment 59

thomas.wong1986 says

That is totally funny! Dont you just hate how the market goes into a era of "corrections". Have fun! your paying less, and saving more cash today and into the future.

Again, this is WHY sellers want to see if you have proof of funds to cover. If you just have 20% for the down payment, why would the seller even accept the offer from a buyer who may not be able to come up with the difference if the appraisal comes in lower. No on really knows what the house is worth until it gets appraised. Once it is appraised, it is in the MLS and they can't re-list it and try to get a different buyer willing to pay the higher "listing" price.

This is why sellers have no-exit appraisal contigencies for normal (non-short/non-REO) properties too. They even want no-inspection exit contigencies as well.

If a seller knows they won't get their price (thru appraisal),they may want a cash buyer.
If a seller knows there is something wrong with the roof, they
will not want a inspection-exit clause in the offer contract. Hence, they don't want FHA buyers.

Without proof of funds, how they hell will a seller know if the buyer is cash, conventional finance, arm finance, or FHA?

This is why your whole auction scenario will never work.

thomas.wong1986   befriend   ignore   Sat, 30 Jul 2011, 4:45pm PDT   Share   Quote   Like   Dislike     Comment 60

eastbaydude says

If a seller knows there is something wrong with the roof, they
will not want a inspection-exit clause in the offer contract. Hence, they don't want FHA buyers.
Without proof of funds, how they hell will a seller know if the buyer is cash, conventional finance, arm finance, or FHA?

This is about an "offer", not terms or language of a final CONTRACT. You do understand what the question above asking.

Again, its not the business of Sellers or Realtors how the property is going to be purchased. That is between the Buyer and their Bank/Lender.

When you sign an contract, as buyer, you have an obligations to the contract. There is no weasling out.

thomas.wong1986   befriend   ignore   Sat, 30 Jul 2011, 4:53pm PDT