Are you looking to sell your home? Do you want someone else to handle all of the coordination and stress that comes with selling a home? Then designating a power of attorney might be right for you. If you’ve wanted to learn about how to sell property with power of attorney, you’ve come to the right place.
When deciding whether to use a power of attorney to sell your property, it’s crucial to understand your options. But first, let’s take a step back to make sure we know what a power of attorney is and how it can make selling your home more manageable and less stressful.
What Is a Real Estate Power of Attorney?
A Power of Attorney (POA) in real estate is a legal document that allows you to give someone the authority to make decisions on your behalf regarding the buying, selling, or management of your property.
Can You Sell a House With a Power of Attorney?
Selling a house using a power of attorney is not only possible but quite common. You might be asking yourself, “Why would I want to use a power of attorney to sell my home?” Designating a POA has benefits to both the seller and buyer in a real estate transaction. For example, there is a lot of complex paperwork when selling real estate. Instead of you (the seller) needing to sign every document as they come up, you could delegate those tasks to your named POA, allowing them to sign on your behalf.
- Principal: In power of attorney jargon, the buyer or seller of a property is referred to as the “principal.” The principal is the person granting a POA to someone else to act on their behalf.
- Authorized Agent/Attorney-In-Fact: The authorized agent, also known as the “attorney-in-fact,” is who the principal gives power of attorney to, which allows the agent to sign documents and make decisions on behalf of the principal.
A power of attorney document can be broad or narrow in scope – which is why you will hear the terms “full POA” and “limited POA.” Whether the tasks you want your authorized agent to complete are more general or specific, you can choose which level of POA makes the most sense for you. In real estate, a limited power of attorney is the standard since you only want an agent to make decisions regarding your property and not other aspects of your life.
Types of Authority
- Limited: Limited POA documents are typically created for one specific purpose. They are most commonly used in real estate transactions to give an agent the authority to sell property on behalf of the principal.
- General: General or broad scope POAs grant the authorized agent a wide range of authorities such as buying and selling your items and accessing your bank accounts. When it comes to selling your home, most banks require a limited power of attorney so they can ensure your interests are being looked after.
- Durable: Durable power of Attorney means you give someone the authority to act on your behalf even after you become incapacitated.
- Non-durable: If you grant a non-durable power of attorney, your agent will not be able to act on your behalf if you become incapacitated.
Why Would Someone Grant POA?
There are many reasons why someone might choose to grant POA to another, convenience being the primary reason. Many people choose to designate a POA when selling their home so they can take a more “hands-off” approach to the process and leave the heavy-lifting to the authorized agent.
Can a Power of Attorney Holder Sell the Property?
The short answer is yes, a power of attorney holder (authorized agent) can sell your property if that is one of the specific authorities you granted them in the POA document. If you give POA to someone, banks will want to see particular language that outlines the duties you are bestowing upon the authorized agent.
Many banks require certain information in the POA document to protect sellers in real estate transactions. For example, most banks will require you to list a “minimum sale price” in the POA. The minimum sales price means the minimum amount you would sell your house for. Having this number in writing shows you’ve done your due diligence and are at least somewhat active in the process (which reassures the bank that the POA is acting in your best interest).
How Do You Transfer Property With a Power of Attorney?
POAs are common legal tools used in real estate. A POA might be used if the principal becomes incapacitated and can no longer make decisions or sign documents themselves. That’s where the authorized agent steps in to coordinate on the principal’s behalf. The authorized agent can sign real estate documents-including the new deed- without obtaining court approval.
The authorized agent must bring the power of attorney document and the new deed to the real estate closing. The agent or the buyer should file the new deed with the Registry of Deeds in their county once the transfer is complete.
How a POA Can Transfer Property
There are a few simple steps you can take to transfer property using a power of attorney.
- Prepare the document: The first step is to prepare the power of attorney form. You may want to consult with a lawyer to draft the document, or you could use this template from the State of MA. You want to make sure it’s evident in the document that your agent has the authority to sell and transfer property on your behalf.
- Give your agent a copy of the document: You want to give your authorized agent a copy of the POA form for their records. When you’re ready for the title to be transferred, the agent must sign the title or deed on your behalf. Sometimes a copy of the power of attorney document must be attached to the title or deed when it’s submitted.
- Have your agent attend the closing: Your authorized agent needs to bring the deed and POA document to the real estate closing to finalize the sale.
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