Home sales in the United States experienced a significant uptick in 2021, when there were a total of 6.1 million residential real estate transactions. Real estate transactions typically involve a single buyer and seller, and the requisite paperwork must be signed in the physical presence of a real estate attorney.
Nonetheless, there are times when either of the parties cannot be present in person to sign the necessary paperwork. Potentially, they can delegate their authority to another party, such as a real estate lawyer.
Keep reading to discover more about power of attorney and where to find the best real estate lawyer in NYC.
What does power of attorney mean?
A limited power of attorney is a legal document authorizing an individual to act in the name of another in legal, personal, or business matters.
The one who creates or gives power of attorney to another is called the principal, creator, or donor. The person being granted authority is called an agent or attorney.
A power of attorney must always be documented in writing.
How do you define a property power of attorney?
By executing a Power of Attorney for Property, an individual (the principal) can grant another individual (the agent or attorney-in-fact) the authority to act on the principal’s behalf with respect to their assets, bank accounts, finances, and other types of property – including real estate.
The agent is typically a member of the principal’s immediate family or a close friend.
Why use the real estate power of an attorney?
The scope of authority granted by a general power of attorney varies. An older person’s spouse, family, or friend can use a power of attorney (POA) to handle a wide range of financial matters. These actions consist of either depositing a cheque into a bank or withdrawing money from a bank.
A power of attorney might go into effect immediately, or it can go into effect only when specific requirements have been met.
When is it necessary to use a power of attorney?
This choice requires serious consideration and should only be made after other options have been reviewed. If you’re at a loss for what to do next, a power of attorney may be a suitable choice.
As soon as it is clear that a POA will be required, all parties involved should get in touch with the closing agent. In most cases, settlement companies can provide the paperwork and direction needed for a successful closing.
Considerations regarding delegating POA
Dealing with real estate issues is a tremendous obligation. However, not everyone is capable of overseeing or performing every activity.
Therefore, if you identify with any of the following reasons, you may choose to explore POA:
- You are perpetually mobile: your job demands you to travel regularly, and because of that, your property manager will be challenging;
- You are physically located in another country: Rather than making repeated trips to the area, selecting a representative can be more efficient.
What should real estate power of attorney include?
In addition to the property’s address and legal description, the POA should also list the names of all parties involved.
Each party in a transaction grants the attorney different rights. For example, the buyer should explicitly state that the attorney is authorized to sign any buyer-specific paperwork.
In the case of a seller, a power of attorney must specify that the attorney is licensed to sign not just the deed but any additional settlement documents.
Common real estate legal documents
In most cases, a seller will hire a broker to help them sell their home. The assistance of a real estate agent could be helpful for a buyer from out of state looking for property.
You can find the complete set of required real estate legal documents below:
1. Real estate power of attorney concerns
Notifying all parties involved in a real estate transaction at the appropriate time is essential. Additionally, it is vital to let all parties know as soon as possible whether a real estate power of attorney will be signing any real estate paperwork.
2. Contract of sale
The sales agreement is often the first legal document signed by both parties in a real estate purchase or sale. The terms of the acquisition are laid forth in this contract, including the price, mortgage contingencies, the down payment, and inspection duties.
Both parties should obtain legal counsel before finalizing the purchase agreement. Then, a real estate power of attorney can sign the contract in someone else’s name.
3. Documents for closing on a title
Closings on real estate typically involve the presence of lawyers for the buyer and seller. This allows for resolving any lingering concerns about inspections, repairs, or title issues.
The settlement sheet, mortgage papers, and notices are obligatory, and the purchasers and sellers then sign other documents.
Real estate power of attorney—What should it include?
The property POA needs must include the following:
- All settlement statements and other forms or documents unique to the buyer are authorized for signature by the buyer’s agent
- A principal, an agent, and any successor agents
- The extent of the agent’s authority, which may only include the closing
- The settlement paperwork signed by the agent
How to close on a home with a power of attorney
Before signing a power of attorney, ensure all relevant information is documented to avoid misunderstandings about the agent’s authority.
The maker should draft the document and have it reviewed by an attorney experienced in real estate closings before signing the POA.
The agent, once appointed, will have full authority to bind the creator with binding decisions. Therefore, the document must bear the time and location of its signing.
Your trusted real estate attorney in NYC
There is no denying the significance of a power of attorney for property in any comprehensive estate strategy.
We at Aminov Law Group can connect you with the best real estate lawyer in NYC. Our legal professionals will aid you every step of the home closing process – whether you choose to do so in person or through a power of attorney.
We cover all the ins and outs of the real estate law spectrum. So if you have any questions about purchasing or selling a home, do not hesitate to contact us.