A power of attorney (POA) is a legal document that authorizes one person — called the agent or attorney-in-fact — to act on behalf of another person — called the principal — in specified legal and financial matters. In real estate, a POA allows someone to sign closing documents, sell or purchase property, execute a mortgage, or make other binding decisions when the principal cannot be physically present or is otherwise unable to act on their own behalf.
There are several types of powers of attorney. A general POA grants broad authority over all financial and legal matters. A specific (or limited) POA restricts the agent's authority to particular actions — for example, signing closing documents for a specific property on a specific date. A durable POA remains effective even if the principal becomes mentally incapacitated, while a non-durable POA terminates upon incapacity. A springing POA only becomes effective upon a specified trigger event (such as the principal becoming incapacitated).
For real estate closings, most title companies and lenders strongly prefer a specific POA that names the property address, the transaction type (purchase, sale, or refinance), the other party's name, and the specific actions the agent is authorized to take. Generic or overly broad POAs may be rejected because they create uncertainty about whether the principal truly intended to authorize this specific transaction. The POA must be properly executed — signed by the principal, notarized, and in some states, witnessed. It may also need to be recorded with the county.
Lender approval is critical when a POA is used for a mortgage transaction. Many lenders have specific POA requirements: the document may need to be dated within a certain timeframe (e.g., within 90 days of closing), the agent cannot also be the borrower on the same loan, and the lender may need to review and approve the POA before the closing date. Failure to meet lender requirements can delay or derail a closing.
At Beycome Title, we accept properly executed powers of attorney for closings, subject to lender approval and state law requirements. We can provide guidance on what your POA needs to include for your specific transaction and coordinate with the lender to ensure pre-approval. Our remote online notarization (RON) technology often eliminates the need for a POA altogether — allowing the principal to sign documents from anywhere via video conference. Get your free closing quote.