Avoid being Red Flagged when purchasing Real Estate with a Power Of Attorney
When purchasing Real Estate with the use of a Power of Attorney, you will want to make sure that the Power of Attorney form is drafted and executed properly in order to ensure that it doesn’t cause the file to become red flagged during the escrow process. The following checklist was provided to me by First American Title Insurance Company.
New Power of attorney Forms:
- Contact Escrow Officer to Prepare the form acceptable to title
- Escrow can prepare even if order isn’t opened yet
- New Lender (if any) will also need to approve use
- Name of person granting power will need to match name on new loan documents
- Escrow Officer will need name of person granting power; name of person receiving power, property address, name of new lender
- Power of Attorney will need to be notarized
- Original Power of Attorney needs to be retained by agent or Escrow Officer for recording at closing.
Existing Power of Attorney forms
- Form Must be submitted to Escrow Officer immediately for review and approved by the title department
- Most existing forms cannot be approved if they are not specific to the property
- Most existing forms cannot be approved unless they are dated within the last 2 (two) years
- If the form is approved, the original must be supplied for recording at closing
- The original grantor of the Power of Attorney cannot be incapacitated mentally and must be able to understand what the Power of Attorney is being used for.
- Durable Power of Attorney forms are generally unacceptable to title underwriters unless specific language is included regarding negotiations of contracts and execution of real estate specific documents
- In the case of Alzheimer’s or other mental incapacitating ailments, a Guardianship is required, which does require the services of an attorney and court approval
Other Important Notes
- Most Trust Agreements will limit a Trustee’s ability to assign their trustee rights by use of a Power of Attorney, so if you are in title under a trust, a Power of Attorney may not be allowed.
- Some short sale lenders will require approval of the use of a Power of Attorney through a closing.
Disclaimer: This information was provided to me by First American Title Insurance Company. I am not an attorney or an escrow officer. The information contained in this article/blog is intended to provide general information on the subject and not to provide any legal, tax, escrow or credit advice. You should not act upon this or any information without first seeking independent tax and/or legal counsel.
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Should you have any questions or need further information,
please don’t hesitate to contact me, (775) 220-1630
Or visit my website: www.SellingHomesinReno.com
Joshua Talayka
NAR designated: Short Sale & Foreclosure Resource
Chase International
Office: 775 850 5900
Toll Free: 877 922 5900
Cell: 775 220 1630
Fax: 775 850 5901
985 Damonte Ranch Pkwy, Ste. 110
Reno, Nevada (NV) 89521
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