A power of attorney is a legal document that gives a person (agent) the authority to handle the affairs of another person (principal) in certain situations. The agent should work and make decisions in the principal’s best interests. They are just given the power to handle some matters like real estate transactions, but not the right to do whatever they want regarding the task authorized to do by the principal.
What is a Real Estate Power of Attorney?
A real estate power of attorney is a legal document that gives a person (an adult child or relative) the authority to handle real estate transactions like buying or selling a home on behalf of another person (aging parent or senior).
For instance, the document is used when a parent is ill and would like to sell a home. The parent can create a power of attorney by assigning an adult child the power to sell the house. But note that the power is usually terminated once the transaction is completed.
Situations One May Need to Use a Real Estate Power of Attorney
Many reasons can make a person assign real estate power of attorney to another person. Here are a few reasons:
Medical issues – if your aging parent is sick, they can assign a real estate power of attorney to you or another member of the family to complete real estate transactions like buying or selling a home on their behalf. This will ensure the transaction is completed while the parent recuperates in a hospital or home.
Work commitments – if a person is overwhelmed by work, they can create a real estate power of attorney to assign authority to another person to help buy or sell a property.
Other Reasons – If one has traveled abroad and wants to buy or sell a home, they can create real estate power of attorney to assign authority to another person to sell or buy the house on their behalf. Also, if a principal feels that they can’t handle the complicated real estate transactions, they can draft a power of attorney, assigning a trusted person to handle the transaction.
components of a Real Estate Power of Attorney
1. Property details– The POA should have the details of the property subject to purchase or sale, such as its location, size, and address.
2. Parties Involved – Principal, agent, and any other person as outlined by your state laws. Some states may require a witness(es) to sign the document.
What Is the Agent Expected to Do on Behalf of the Principal During the Transaction?
If the principal buys a house, the agent should look for one, negotiate for a fair price, and sign all buyer-specific forms and documents like the sale agreement, deed of trust, etc.
If the principal is selling their home, the agent should look for a buyer and sign the deed and other documents regarding the sale. They also oversee the whole process to protect the principal’s interests and rights.
If you want to sell or buy real property, but can’t handle the transaction due to an illness or other reasons, Forms. Legal can help. We offer real estate power of attorney templates you can complete and sign at your convenience.