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If you plan to use a power of attorney for a real estate closing, preparation is key. From making sure the document is legally valid under your state’s laws to coordinating with your title company and choosing the right agent, a few proactive steps can prevent delays. Here are three essential tips every seller should know.
Whether you’re selling a home in Los Angeles, CA, Miami, FL, or Denver, CO, this Redfin guide will walk you through how using power of attorney for a real estate closing works, why sellers rely on it, and the key steps to make sure it’s done correctly.
What is a power of attorney in real estate?
A power of attorney (POA) is a legal document that may allow another person (called the agent) to act on your behalf in a real estate transaction, depending on the state law. In practice, this usually means the agent can:
- Sign the deed and closing documents
- Attend closing in your place
- Handle transaction details requiring your signature
Types of POA sellers commonly use
- Limited or special POA: Authorizes your agent to handle a specific property sale, often tied to the home’s legal description.
- Durable POA: In some states, a durable POA may remain valid even if you become incapacitated. This can be especially useful for elderly or ill sellers.
When a POA makes sense
- Living out of state or relocating before closing
- Overseas for work, travel, or deployment
- Facing medical limitations that prevent attendance
- Military schedules or deployments that conflict with closing
>> Read: Does the Seller Have to be Present at Closing?
3 tips for using a power of attorney on closing day
For sellers who can’t attend closing in person, a power of attorney (POA) can be a valuable tool. Still, success depends on meeting strict legal requirements in your state and planning ahead. To make sure the POA is suitable for your needs and will be accepted at closing, it’s a good idea to consult with an attorney.
1. Make sure your POA meets all legal requirements
To be accepted, your POA generally needs to meet certain requirements, which may include:
- Be in writing, signed, and notarized (some states require witnesses)
- Be recorded in the county if the agent signs the deed
- Specifically authorize your agent to sign deeds, disclosures, and closing documents
- Avoid being too broad: general POAs are often rejected by lenders and title companies
Pro Tip: It’s a good idea to send your POA to the title company and lender for review well before closing.
2. Watch out for common risks and challenges
Even with a POA in place, sellers may encounter obstacles. Knowing the common risks ahead of time can help you avoid surprises.
- Lender and title restrictions: Some reject POAs or require their own forms
- Invalid paperwork: Errors, outdated wording, or missing notarization can void it
- Fraud risk: Your agent must be absolutely trustworthy
- Timing delays: Originals may need to be mailed, notarized abroad, or filed with the county
3. Prepare early and coordinate for a smooth closing
A well-prepared POA can make all the difference on closing day. Follow these steps to keep your sale moving forward without interruptions.
- Start early: Don’t wait until the week of closing
- Coordinate with your agent and title company to confirm acceptable language
- Use a limited POA tied to your property’s legal description
- Follow your state’s specific requirements for notarization and witnesses
- Choose wisely: Select a trusted family member, attorney, or close friend
Pros and cons of using a power of attorney
Using a power of attorney for a real estate closing offers convenience but carries legal, logistical, and trust risks. Sellers should weigh these pros and cons before using one.
Pros of using a power of attorney
- Keeps the sale moving if you can’t attend closing
- Provides flexibility for sellers who are out of state, overseas, or medically unable to attend
- Saves time and travel costs by delegating signing authority
- In some states, a durable POA may remain valid if the grantor becomes incapacitated, which can provide added protection in emergencies
Cons of using a power of attorney
- Some lenders and title companies may reject or heavily restrict POA use
- Risk of invalid POA if it isn’t notarized, recorded, or worded correctly
- Fraud risk if the chosen agent isn’t trustworthy
- Extra steps required: notarization, witnesses, recording, and lender approval
Alternatives seller should consider
Using a POA is not one size fits all – it can be worth it to consider alternatives that best fit your requirements and needs.
- Remote Online Notarization (RON): Sign digitally with a notary via video, if permitted in your state
- Mail-away closings: Sign and return documents by mail before closing day
- Rescheduling: If timing allows, simply push closing to avoid needing a POA
>> Read: Can You Close on a House Remotley?
Making a POA work for closing day
For sellers who can’t attend closing day, a carefully prepared power of attorney can help tremendously. Be sure to choose a reliable POA and ensure precise wording, proper notarization, and early approval from your title company and lender to avoid delays.
FAQ: Using a power of attorney for a real estate closing
1. Can I revoke a POA before closing if I change my mind?
In many cases, a power of attorney can be revoked in writing (often requiring a signature and notarization), as long as the grantor is competent. Inform all parties to avoid closing issues.
2. What happens if my POA isn’t accepted by the buyer’s lender?
If your lender rejects the POA, your agent can’t sign loan documents. You’ll need to attend closing, provide a new POA, or find another solution with the lender and title company.
3. Does my agent under POA have the authority to negotiate terms, or only to sign documents?
A POA’s scope varies with its wording. Limited POAs are for document signing, while broad or durable ones may include contract negotiations. Define your agent’s powers clearly with legal guidance to avoid issues.
4. Can using a POA slow down the closing process?
Early preparation and approval of original POA documents can prevent last-minute closing delays caused by non-compliant POAs, which may need to be mailed, recorded, or reviewed by the title company and lender.
5. If I’m selling multiple properties, do I need a separate POA for each?
Typically, yes. A POA should be specific to the property, often requiring its legal description. Selling multiple properties usually means a separate POA for each to prevent closing issues.
The post 3 Tips for Using Power of Attorney for a Real Estate Closing appeared first on Redfin | Real Estate Tips for Home Buying, Selling & More.
