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May 08

Power of Attorney for Real Estate Closing

A Realtor asked me this morning how to get a Power of Attorney for one of their clients in an upcoming closing.  A POA is a document that allows an individual to sign legal documents on behalf of another individual.  An example would be a wife signing the deed or mortgage on behalf of her husband or vice versa.

The sellers are closing on the sale of their home and turning right around and buying another home an hour later.  It isn’t like the closings are a surprise, it takes a long time and a lot of effort to sell one home and purchase another. 

In the past twenty plus years I have only seen a POA used in a real estate closing a hand full of times, maybe two or three out of a couple of thousand.  It doesn’t happen very often, and really should only be used in an emergency or under extreme circumstances.   

Yet the subject has been brought up more times in the last six months than in the previous twenty years combined.   Both buyers and sellers have approached me about not attending closings.  Where is this coming from?  I had one buyer simply refuse to attend the closing, they are retired, no job conflicts, just didn’t want to come to the closing.  

Now come on, tell me what could possibly be more important than making sure the closing goes down as expected?  I don’t understand. 

Loan applications are becoming just as tricky these days. Another guy told me he couldn’t afford to take off work to drop by my office to sign a loan application on a $150,000 mortgage.  Does he not realize how that sounds?  My budget is running so close I can’t take off work for an hour – lend me $150,000 please.

Perspective

Buying a home is a very long term commitment, something that should not be taken lightly.  Most buyers spend more time looking at homes than they do planning the transaction, the exact opposite of what they should do.  When it comes to the closing I require an original signature on my note, not a POA.

If you are selling a $200,000 home, how much do you need to be earning per hour on your job to make it more important than attending a closing?  Even if the lender allowed it, if I were the buyer I would want to see the seller sign the deed that gives me title to the house.

Reality – It takes almost the same amount of time to sign a POA in front of the closing attorney as it does to attend the closing.  If you have the POA prepared by an attorney other than the closing attorney it may not be approved by the closing attorney, highly possible if the one preparing it is not a real estate closing specialist.  If that happened it would actually take longer than attending the closing. 

This is the largest financial transaction most people have in a lifetime, you need to attend the closing if at all possible.

 

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