Power of Attorney for Real Estate Transactions

I got a search for how one spouse could sign while the other was out of town, and act on their behalf. Since both spouses usually need to sign real estate papers, this is a real concern.

Actually, almost anybody you designate can sign for your real estate transaction, whether or you're available. The usual thing is you're out of town for some reason when closing happens, and so your spouse signs for both of you, themselves in their own right, and you by Power of Attorney. This actually covers all kinds of situations, not just real estate.

It is to be noted that real estate documents can usually be signed anywhere in the United States, so long as there's a notary available. I've had documents sent across the country multiple times. It's only when the principal is out of the country that life becomes difficult, as there's a requirement for the documents to be signed in the United States. The only way I'm aware of to have that done abroad is at an US embassy, where according to international law, the grounds are US territory. The chances of a US embassy having a notary are excellent, as they are employees of the US State Department, after all, and such services are part of the ones they exist to provide, but they're typically on a forty hour week Monday through Friday schedule and their fees are higher than most. I have done one such transaction, and I do have to report significant potential stumbling blocks.

The document required for someone else to sign documents on your behalf is called a Power of Attorney. You must sign it and have it notarized that it was really you that did so. In the case of real estate, it will be recorded along with the document it enabled your representative to sign. In it, you designate one particular person who has the right to undertake an action or group of actions, and they then act on your behalf, as your "attorney" for this matter.

Powers of Attorney can be made for all sorts of things, not just real estate transactions. For instance, pretty much everyone should have a Durable Power of Attorney for Health Care. Powers of Attorney can be broad and ongoing or limited to one specific action in a limited range of time. You set this up at the point in time when you execute it. Whatever terms you set up when you signed it are binding, both upon you and the person you designate. Most stationery and office supply stores have ready made ones where you just fill in a few blanks and you're ready to have it notarized. I've seen ones with check marks, but those are dangerous in my opinion, as when a particular check mark was placed on there is a matter for considerable legal dispute. I'm not an attorney, but you don't have to be an attorney to be able to understand the potential problems there.

It is a misconception to believe that this person must always be an actual licensed attorney. In general, they need not be an actual attorney, only a competent adult. I'm sure there are circumstances when being an attorney is necessary, but it is not necessary most of the time. There may be circumstances where you may want a licensed attorney even where it is not legally necessary, but there's a major difference between being legal and being smart.

I've seen not only spouses used, but other relatives, close friends, and professionals such as accountants and attorneys. Note that the person you designate does not have to accept, and does not have to act on your behalf even if they accept. The idea is to get their consent first, and make certain they know your mind in the matters you designate them for.

Extremely important: You really need to trust the person you designate to act in your best interest, as well as to make certain they understand everything they are signing. If they sign something that you would not have, you must honor the contract, as long as it is within the mandate of that power of attorney. Whatever contract they signed on your behalf, you can be legally forced to live up to the terms. Your designate doing something you would not have is a side issue between you and the person you designated. That person with your power of attorney designate's signature on a contract can force you to live up to that contract, which is how it should be. Otherwise, nobody would accept powers of attorney as valid, and they would be regarded as one more way to run a scam. They're not supposed to be a scam at all, it's intended to be a way for one person to do another person's business legitimately. If they weren't as enforceable as the contract you signed yourself, nobody would accept them, and the business would have to await your ability to deal with it in person.

Caveat Emptor

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