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A power of attorney (POA) is a legal document authorizing someone to act on your behalf. For real estate, this means signing documents, managing property, or completing transactions when you cannot be present or are unable to act yourself. Without proper authorization, no one—not even a spouse—can legally sign for you.

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How It Works

Principal: Person granting authority (you) Agent/Attorney-in-fact: Person receiving authority to act (not necessarily a lawyer) The agent can only do what the POA document specifically allows. Powers can be broad or limited to specific actions.

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Types of Power of Attorney

Grants broad authority over financial and legal matters, including real estate. Agent can buy, sell, mortgage, or manage property.Ends if principal becomes incapacitated (unless “durable”).
Remains effective if principal becomes incapacitated. “Durable” language must be specifically included.Essential for planning—handles situations where you can’t act for yourself due to illness or injury.
Grants authority for specific actions only. Common for real estate closings when principal can’t attend.Example: “Agent may sign closing documents for sale of 123 Main Street on my behalf.”
Only becomes effective upon a specific event, usually incapacity. Requires proof that triggering event occurred.Less common due to complications proving the trigger.

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POA for Real Estate Transactions

  • Closing when principal is out of town or country
  • Military deployment
  • Illness preventing attendance
  • Managing property for elderly parent
  • Handling affairs during extended travel
Most lenders accept POA for closings but require:
  • Original or certified copy
  • Specific language authorizing the transaction
  • POA executed recently (some require within 6-12 months)
  • Lender approval before closing
Some lenders refuse POA entirely. Verify before relying on it.
Title companies typically require:
  • Review and approval before closing
  • Recording of POA with the deed
  • Specific property address or description in POA
  • Notarization and proper execution
Verify acceptance before closing. Not all lenders or title companies accept POA. Some have specific requirements. Confirm well in advance to avoid closing delays.

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Creating a Valid POA

Requirements vary by state but generally include:
  • Written document specifying powers granted
  • Principal signature while mentally competent
  • Notarization (required in most states)
  • Witnesses (required in some states)
  • Specific language for real estate authority
  • Recording (required for real estate transactions in most states)
POA forms vary by state. Generic online forms may not meet your state’s requirements or be accepted by lenders and title companies. Attorney-prepared documents are recommended for real estate matters.

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Limitations and Risks

Agents have significant power. Choose someone trustworthy. Consider requiring co-agents or accountings for large transactions.
Banks, lenders, and title companies can refuse to honor POA, especially if old, unclear, or doesn’t meet their requirements.
Principal can revoke anytime while competent. But third parties who don’t know about revocation may still rely on it.
POA terminates immediately at principal’s death. Agent has no authority over estate—that requires executor/administrator appointment.

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Ending a POA

A power of attorney ends when:
  • Principal revokes it in writing
  • Principal dies
  • Principal becomes incapacitated (unless durable)
  • Specified expiration date passes
  • Agent dies, resigns, or becomes incapacitated
  • Court invalidates it
To revoke, notify the agent in writing and notify any institutions that received copies.

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POA vs Other Documents

DocumentPurpose
Power of AttorneyAuthorizes someone to act for you while alive
WillDirects property distribution after death
TrustHolds property for beneficiaries, works during life and after death
Healthcare DirectiveAuthorizes medical decisions, not financial
These documents work together but serve different purposes. POA handles matters while you’re alive but unable to act.

Next: Transferring Ownership

Deeds, title changes, and transfer methods

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