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Is there a Power of Attorney involved in your real estate transaction? If so, you may have a potential time bomb on your hands. If you do not have a transaction that involves a POA, but know your client has one and will use it in an up-coming transaction, you need to act now. Have your trusted title/escrow person take a look at the Power of Attorney and make sure the title/escrow company will accept it for the transaction/potential transaction. I recently experienced a situation where a client used a POA on a transaction that went through just fine, but when we used it for another transaction involving the same family members we discovered the lawyer had drawn up the POA specific for the first transaction only. Thankfully we discovered this a few weeks before closing because I asked my client to have title/escrow check it out to make sure we would not run into issues. I'm glad I did, because my client did not know the POA was specific to one particular transaction. Needless to say, I'm happy that we didn't find this out the day my client went into sign closing docs, but it still caused us to close late and put the buyers in jeopardy of losing their rate lock. It turned a fairly routine transaction into a stress for all involved. My policy is to ask if there is a Power of Attorney involved in my clients transaction and if so, I ask the client to have title/escrow look at it right away. In this market, it is far better to be proactive with every component of a transaction than to wait and let the chips fall where they may. As always, I am here to assist you with all your real estate needs. I am here to answer all your Crescent City / Del Norte County real estate questions. Thank you for stopping by. |
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No one sold more homes in Del Norte County in 2009, 2010 and 2011--*in units sold and volume--than Fran Gatti. Put Fran to work for you!
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Fran---the power of attorney is some times a nightmare...when I was doing home inspection the buyer could not be there...to sign my contract...so this person was acting for buyer...well that mess of thing to do...i don't like them at all
Power of attorney can be an aid. As you stated escrow needs to review.
Most POA are specific to the immediate transaction. I usually have title/escrow send it out. They know what they need, so they'll do it right. Glad that all's well that ended well!
Fran,
Excellent point. Twenty-seven years in real estate finance has exposed me to numerous Power of Attorney issues. Your advice is dead-on!!!
Most lenders require the POA be a "Specific Power of Attorney" for that very reason. I generally recommended that the escrow attorney draft the POA at time of contract, send a draft to the lender's closing department, and utilized FedEx overnight services to expedite the execution of signatures in the process.
IF the clients had already executed the POA, I sent a copy (immediately) to the lender and to the attorney. Situations involving a party overseas can seriously exasperate the situation; but it can be pulled off. I had an applicant whose wife was in Iran (I was scared), but we pulled it off and closed on time.
You know the significance of the word "Assume." This is absolutely one of those "un-anticipated" delays.
Its alway good to be proactive like you did in checking out the POA. I hate it when everyone all of a sudden starts doing their job just days prior to the close of escrow.
Nice blog signature.
Thanks for your comments.
Well, I had one today, Fran! She would not give the keys to anyone since the recording will be done tomorrow.
Fran it sounds like it was good you asked. Most people don't realize that a POA is property specific.
Hi Fran -- Always good to be proactive. Great advice.
Good to get as much info up front as possible.
We have title companies do the closing in or area and many require different wording on the POA they will accept. Therefore, I have the title company provide the wording they prefer and then give it to my client to have a POA drawn up. This has prevented issues thus far.
Thanks for the reminder.. I just closed 2 estates and that was a learning experience.!!!
Hi Fran - It is always a good idea to read the power of attorney to ensure that it covers the particular transaction. Also, it is also a good idea to inquire whether the power of attorney has been revoked. I regularly have seen powers of attorney revoked at a later date.
Fran, in military towns, spouses often have general POAs when their spouses are deployed and they think they can use it for a real estate transaction. Wrong. You have to have a real estate specific POA and the lender has to agree that one is acceptable at all. You are right that this must be done early in the transaction so there are no hiccups at the end. Great reminder.
Fran, thank you for the heads up. I only once had a transaction that involved a power of attorney. But we used it only to submit the offer, which was never accepted. Next time I have one transaction with POA I will make sure to have title check it before hand. Thanks.
Thanks Fran and thank you AR members who added info to this post with your comments. I learned a little bit more today thanks to all.
Good advice. It is always wise to verify a POA with your title company or closing attorney as we don't like surprises especially late in the game.
I'm glad to know I'm not the only one who has had a learning lesson with a POA. As is the case so much of the time, these are the lessons I will NEVER forget. Thankfully it all worked out.
how about this, pay attention now.
on a fannie transaction the poa used by the management company to execute the contract and the poa used by the closer are seperate. get em both and have them reviewed.
I have one for my next transaction closing in December - thanks for the tips/advice!
Fran, this is very good advice. I haven't run across an attorney yet who doesn't use their own Power of Attorney. Good to get it done way ahead of time. Thanks.
Great advice Fran. Not only does the Power of Attorney need to be acceptable to the title or escrow company, but it must also be acceptable to the lender as well.
Hi Fran, thank you for the heads up. Absolutely, good idea to have it checked out to bomb-proof the transaction. I think the same idea may apply to buyers and sellers when an LLC is involved - can they prove they have signing authority?
Fran, you also want to make sure that the lender is cool with a POA. Sometimes they are not.
Fran- This information is spot on. Great post about something we should all be on the lookout.
Yes, we've had to use POA's, and they were drawn up for the specific transaction. Luckily I have not run into this situation yet. Something to think about! Thanks.
I learned that in POA situations, it's not always clear cut who exactly you're "supposed" to talk to. when coordinating the details of a transaction. Sometimes your contact person isn't the only one who wants to be in the loop.
That was smart! I always get a copy for the file and read it over before we take it to closing, for just that reason.
I had a personal experience with a power of attorney recently. My fiance is currently deployed and we were refinancing our home. He sent me the power of attorney and the Jag had notarized it but no one witnessed it. Military law does not require any witnesses but our local attorney required two witnesses. Lesson learned...check civilian laws against military laws! As someone mentioned above you will need a property specific power of attorney whether you are buying the home or refinancing.
Wow, thanks for the great advice to add to this post.