How a Real Estate Power of Attorney Can Be Used in a Real Estate Transaction?
A real estate power of attorney (POA) is a legal document. A POA gives one person the authority to act on behalf of another person – in some personal, legal, or business matter. A power of attorney should be in writing. The person who gives the other person the authority to act is the principal. Other names for the principal include a donor or creator. The person who gets the authority to act on behalf of the principal is the agent.
Why use a real estate power of attorney?
A general power of attorney serves different purposes. Often a spouse, relative, or friend uses a POA to handle many different types of financial transactions for a senior. This includes depositing checks in a bank or making withdraws from the bank. A power of attorney can be immediately effective or can become effective upon certain conditions.
A real estate power of attorney is for the buying and selling of real property. In Florida, many people from other parts of the country or parts of the world want to relocate to Florida. Some want a Florida vacation home. A real estate power of attorney is a legal way that that someone can help with the purchase of the real estate until the principal is ready to relocate or spend time in Florida.
When is it proper to use a real estate power of attorney?
There are different stages involved in buying and selling real property. Typically, the buyer is the one who seeks to use an agent through a POA. However, a seller who needs or wants to move quickly may also want someone to handle the sale of his/her Florida real estate. At each stage of the real estate process, there needs to be signatures on contracts and legal documents. The buyers and sellers can sign these agreements on their own. It is better if they consult with an attorney. Mailing documents may be an option. Powers of attorneys are necessary when time is of the essence. Florida real estate lawyers should review each document first.
Common legal real estate documents
If a seller wants to sell his/her property, they will normally enter into a contract with a broker.
An out of state buyer may want to hire an agent to help locate Florida real property.
The sales agreement
The first document that is typically signed by both the buyer and seller in a real estate purchase/sale is the sales agreement. This agreement sets forth the purchase price, mortgage contingency requirements, deposit requirements, inspection obligations, and many other matters. Buyers and sellers should have an attorney review the agreement of sale before any signatures are placed on the sales agreement. The agreement can be signed through a real estate power of attorney
Title closing documents
Normally, the buyer and seller both appear at the real estate closing with their lawyers. This way, any open issues such as inspections, repairs, and title defects can be discussed. The buyers and sellers then sign the settlement sheet, the mortgage papers, and regulation notices, and other documents.
Practical real estate power of attorney issues
If a real estate power of attorney is going to be used to sign any real estate documents, then it’s best to communicate that desire or need as soon as possible so there can be a review of any objections.
What should the real estate real estate power of attorney include?
The real estate POA should:
- Identify the property involved – the one that is subject to the sale or purchase. This includes address of the property.
- Name the parties to the real estate power of attorney – the principal, the agent, and any alternative agents.
- If the buyer is the principal, the agent should be given the right to sign all buyer specific forms and documents, and settlement statements, mortgage agreements, notes, and deeds of trust.
- If the seller is the principal, the agent should have the authority to sign the deed and any other documents that relate to the sale of the property such as the settlement sheet.
- The real estate power of attorney should identify that the authority applies to specific situations such as the closing. More specific powers are generally better than broad powers.
How to execute the POA
The principal should have a Florida real estate lawyer draft and/or review the real estate power before it is signed by the principal. Principals should understand that the agent will be given powers to decide key issues that will bind the principal.
Generally, the signature must also include a notary acknowledgement of the date of the principal’s signature and the place of the signature.
If the principal is out of the country, then the principal will likely need to sign the real estate power of attorney at a US consulate or embassy. Military personnel can sign the POA before a military officer.
A real estate power of attorney should generally have an end date. After the termination date, the real estate power of attorney is not effective.
Additional requirements may apply.