Why closings use powers of attorney
Common reasons include military deployment, overseas work, serious illness, or a co-owner in another state. The principal gives another person authority to sign particular documents on their behalf.
A closing is not a casual use of the tool. Many lenders accept a power of attorney only with advance approval.
What gets reviewed first
Expect them to want a copy of the document early. They check that it covers real estate transactions, that it was properly signed and notarized, that it is current, and that the agent's powers match the deal. Some require that it be recorded in the county before or with the deed.
Lenders may have additional demands, such as a specific power for the loan, or may refuse to use one at all for certain products.
How the agent signs
The attorney-in-fact signs the closing documents with a signature line that shows capacity, commonly the principal's name followed by the agent's name and a phrase such as attorney-in-fact. The exact form is dictated by the title company.
The notary identifies the attorney-in-fact, who is the person before them, and completes a certificate showing the signer's role.
Common obstacles
A power of attorney that is old, limited to unrelated matters or lacking a notarization may not be accepted. A principal who has died or lost capacity ends most powers. A buyer who has not seen the final numbers should not be signing by proxy.
Because a power of attorney can have large consequences, ask an attorney if it fits your situation. A notary cannot tell you whether it is valid.
Alternatives
If time allows, a mail-away signing in front of a notary where the principal lives, or a remote online notarization where permitted, may be simpler. These keep the principal in control and avoid questions about authority.
Questions to ask the title company and protecting the principal
Do you accept this power of attorney, or do you need a new one for this transaction? Must it be recorded? Does the lender have its own form? Do you need proof that the principal is alive and has capacity? Who signs the settlement statement?
Getting yes or no answers in writing a few days ahead avoids a failed closing on the final day.
A power of attorney gives someone else the pen, so choose the person carefully. The principal should see the closing numbers and approve them in advance. Some principals limit the document to one property and one date range. An attorney can draft such a limit. Keep copies of everything the attorney-in-fact signed.
Keep in mind that a power of attorney ends in several situations, including the principal's death, revocation, or the expiration date written in the document. Sign the closing documents while the authority is clearly in force, and keep proof of the date on which each paper was signed. If the principal's health is in doubt, speak with an attorney before the closing, not after problems arise.
Common questions
Does the notary check that the power of attorney is valid?
The notary confirms who is signing and may note the capacity. Legal sufficiency of the power is for the title company and counsel to decide.
Is a springing power of attorney accepted?
Some are, with extra proof that the triggering event occurred. Ask the title company early.
Can the attorney-in-fact be a buyer's agent?
That depends on the title company and applicable law. Conflicts of interest are a common concern.
This guide is general information, not legal advice. Fees and procedures change; check with the office involved or an attorney for your situation.