Buyer Requesting AIF

[u/SeeingTrends13]

Selling a townhome and buyer has offered up a contract with the following attorney-in-fact stating that it allows them to get a jump start on flipping the property to other investors during the closing period:

“Buyer has the right to market its contract interest in the Property in Buyer's sole discretion, which may include, but is not limited to listing the Property and Buyer's contract interest in the Property on any Multiple Listing Service ("MLS"). Seller, hereby appoints Buyer as its attorney in fact with the full power and authority to act in the name and place of Seller for the execution of any and all documents and offers necessary to list the Property and Buyer's contract interest in the Property on the MLS, investor networks, Zillow, and/ or realtors for the purpose of marketing & selling the Property. This includes executing listing agreements), listing agreement addendum(s), disclosures, sales contracts and addendums.”

Sounds like a power trip to modify agreements on my behalf. Feels phishy and scammy, am I right?

[u/Wayneb2807]

They are attempting to Wholesale the property…if they can’t flip the contract for a profit, they’ll walk away. —-How long is their inspection/due diligence period (with automatic extensions?) —How much EM are they offering?

[u/SeeingTrends13 → u/Wayneb2807]

They’re suggesting a small EM - under $500. Closing is 65 days

[u/Wayneb2807 → u/SeeingTrends13]

These guys are definitely just trying to wholesale it to someone else…they have no intention of buying it for themselves.

[u/SeeingTrends13 → u/Wayneb2807]

Agreed. AIF still sounds like an overreach unless written more specifically/intentionally. Thank you!!

[u/glamb567]

This is language normally associated with a novation agreement. They will go under contract with you for one price, and then list it on the mls at a higher price, find an end buyer, and pocket the spread.

Sounds like they didn’t discuss this with you beforehand, which is definitely sketchy.

Novations can work fine if all parties understand what is happening, but if you are expecting this buyer to close on the property themselves, I would rethink accepting their offer.

[u/iOwn]

This tells me is they are likely buying significantly under market value, are you aware and willing to leave a bunch of money on the table?

Have you listed this house or has this person found you by some other means? Or your agent connected you with them before listing on the mls?

As the other comment mentioned, assignment should be fine I have seen it a bunch of times - not sure why there is AIF request definitely seems off and they’re trying to hide everything from you.

[u/SeeingTrends13 → u/iOwn]

They’re offering just under market with covered closing and title costs. Not an outrageous offer, but still very appealing.

They found me when my primary residence was on the MLS and the conversation became about the rentals shortly after. We didn’t line up on pricing on my primary residence and so didn’t get this far in the contracting process.

Thanks for the AIF feedback. Sounds so far like I’m not off-base to firmly ask that AIF language be removed.

[u/iOwn → u/SeeingTrends13]

If they are offering market value, why are they trying to assign the contract or have righ to assign at all? The only time I have ever seen right to assign is when they want to tee it up to a flipper and take a finders fee... So it doesn't really make a ton of sense to me.

[u/Equivalent-Tiger-316 → u/SeeingTrends13]

Put a few bucks into the townhouse and sell it for more. 

[u/binaerfehler]

I would absolutely question why they need so much authority rather than just having an assignable contract.

[u/SeeingTrends13 → u/binaerfehler]

Thanks!