Power of attorney (POA) in real estate is a legal document that lets someone make decisions and act on your behalf to sell your home, sign deed documents, and more.
A power of attorney to sell property can be especially useful if you're out of town, unavailable, or helping a loved one who can’t manage the transaction themselves. Whether you're the buyer, seller, or acting for someone else, it allows the deal to move forward when one party can’t be there in person.
However, POAs add important steps and considerations to an already complicated real estate process. Here’s what you need to know about power of attorney to have a smooth home sale.
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Understanding power of attorney in real estate
In general, a power of attorney is a legal document that gives a person the power to act on behalf of another.
POA agreements have two main parties: The principal and the agent.
- The principal is usually the property owner who authorizes the other person to act on their behalf.
- The agent is the person granted authority to act on the principal's behalf. The agent is also known as the attorney-in-fact, even if they aren’t a lawyer.
What the agent is allowed to do is specified in the power of attorney document. All states accept a power of attorney, but the rules and requirements for the document to be valid vary between states.[1]
Types of power of attorney
There are several types of power of attorney, each one granting different degrees of authority depending on what decisions the principal wants the agent to make.[2]
- General POA: Grants broad powers across various matters.
- Specific/Limited POA: Restricts authority to particular tasks, such as selling a specific property.
- Springing POA: Becomes effective upon a specified event, like incapacitation.
- Medical power of attorney: Grants the agent authority to make medical decisions on behalf of the principal, including medications, surgery, end-of-life care, and more.
A POA can also either be a:
- Durable POA: Remains effective even if the principal becomes incapacitated.
- Non-durable POA: POA ends if the person becomes incapacitated or mentally unable to carry on their affairs.
What is real estate power of attorney?
“There's a power of attorney specific to real estate where where the buyer or seller of real estate may be out of town and want to hire an attorney as their power of attorney to sign the deed documents for them,” said Shane Zisman, attorney at Zisman Law, in an interview with Clever.
“It typically has to do with just a buyer or a seller not being present at the transaction and having an agent, often a licensed attorney, sign documents for that.”
Example of POA in action
Say you’re helping an elderly parent who’s mentally sharp but has trouble managing tasks physically. You might start with a limited POA to handle paying bills or accessing bank accounts.
Later, they may give you a general POA so you can take care of bigger responsibilities, like managing finances or selling their home. If the POA is durable, it will stay in effect even if your parent becomes mentally incapacitated.
Without that durability, your authority would end once they can no longer make decisions for themselves.
Can you sell a house with power of attorney?
Yes, you can use power of attorney to sell property, as long as the document clearly gives you that authority. General POAs let you do anything the principal can do.
If the only authority you want is to be able to sell someone else’s house, then “a good attorney can prepare a limited power of attorney” said Jyothi Pallapothu, Real estate attorney at JP Legal, LLC, in an interview with Clever.
It should also include “the goal of the of the power of attorney (such as only selling a property), the length of the time the power of attorney is good for (for example, only good for 6 months), and give details on how the person with the power of attorney can sell the property and disburse the proceeds.”
Fiduciary responsibility
While POAs let you make decisions on another person’s behalf, you still have a fiduciary responsibility. This is the legal and ethical duty to act in the principal’s best interest. For example, you generally can’t give their home to yourself as a gift unless the POA grants you this authority. You also likely can’t sell the house for significantly less than market value.[3]
How to execute a real estate power of attorney
Each state has rules and forms for executing a real estate power of attorney, but the general process usually follows these steps.
Step 1: Start with a conversation
The principal must fully understand what it means to give someone power of attorney for real estate. And while you can explain why you're a good fit, it’s their choice.
If it’s an aging parent that would be the principal, they have every right to speak with an elder law or estate planning attorney before signing anything.
A family meeting and guidance from a compassionate lawyer can help everyone get on the same page. If there are concerns about the principal’s mental capacity, it’s wise to get written confirmation from a doctor and an attorney that they are of sound mind and understand the agreement.
Step 2: Assign an agent
It’s critical to choose an agent that’s trustworthy, responsible, and ideally familiar with real estate matters. Make sure the agent understands their fiduciary duty to act in the principal’s best interest.
Step 3: Draft the POA document
A limited or durable POA is usually the best fit for real estate. You can use a state-specific form, but it’s still smart to have a lawyer review. They can make sure it’s legally solid, correctly completed, and meets the principal’s needs.
The document should:
- Name the property involved.
- Explain exactly what the agent can do, such as listing the property, negotiating terms, and signing documents.
- Include any limits, like a minimum sale price or restrictions on who can purchase the property.
Step 4: Sign, notarize, and record
The principal must sign the POA and have it notarized. Depending on your state, you may need to have it recorded at the county recorder’s office at this time. If not, your title company will likely do it during the real estate sale process.
Step 5: Distribute copies and periodically review
Be sure to provide copies to the agent, attorney, real estate professionals, and any financial institutions involved in the transaction.
If the house won’t be listed for sale soon after the POA is in effect, periodically review and update the POA. The principal’s preferences can change, or the agent can become unavailable.
Step-by-step guide: Selling a house under power of attorney
You’ll want to dot the i’s and cross the t’s when selling a house using a power of attorney. Real estate deals are already full of paperwork and legal rules. Using a POA adds even more complexity. If something’s unclear, missing, or not done by the book, it can hold up the sale or stop it altogether.
Below is a step-by-step guide on what to do to help make the home sale process more seamless when using a POA.
Step 1: Verify the POA's validity and the principal’s consent
Remember that your fiduciary responsibility means acting in the principal's best interest. If they’re still competent and don’t want to sell the home, the POA obligates you to follow their wishes.
If they aren’t mentally competent and you have a durable POA, you can proceed if the sale would benefit them.
From there, you’ll need to ensure the POA is current, grants the necessary authority, and is valid in the state where the home is.
Step 2: Notify relevant parties
Next, inform real estate agents, title companies, and lenders of the POA to make sure it will be honored.
To avoid delays, consult a real estate attorney and work with a title company experienced in POA transactions. Some may have additional documentation requirements before accepting a POA in a sale.
Step 3: List the property
Work with a real estate agent to determine fair market value and properly list and market the home. It may be helpful to hire an agent familiar with POA transactions.
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Step 4: Negotiate offers
As the authorized agent, you’ll handle showings, review offers, and negotiate terms on the principal’s behalf.
Step 5: Close the sale
Once the sale is ready to close, you’ll sign all documents as the agent, using the appropriate format (e.g., "John Smith, as Attorney-in-Fact for Jane Doe").
The deed transfer must include reference to the POA. “Usually, title companies have to record the power of attorney with the local county recorder of deeds office, so there can be a fee associated with that,” said Pallapothu.
Step 6: Maintain records
Once the closing is complete, keep copies of all documents and communications for legal protection. That includes copies of the signed POA, closing documents, and deed for your records.
Be sure the principal receives the final paperwork and sale proceeds, if applicable.
Risks of selling a house under power of attorney
While selling a house under power of attorney can make things easier when the owner can’t be involved, it also comes with legal risks and responsibilities you need to manage carefully.
Potential risks
Here are a few risks to keep in mind when using a power of attorney to sell property:
- Vague or outdated POA. If the document isn’t clear or up to date, the title company may not accept it. The POA may also not hold up in court.
- Misuse of authority or fraud. Overstepping your role or acting for personal gain can lead to legal trouble.
- Personal liabilities. You could be responsible for mistakes or financial losses if you don’t follow the rules.
- Familial disputes. Family members may question your decisions or accuse you of acting unfairly.
- Legal challenges. Others involved in the sale may challenge the POA’s validity or your authority to act.
- Difficulties with the title company. Title companies can reject a POA if they doubt its validity or the agent’s authority.
- Conflicts of interest. Acting in a way that benefits you (or appears to) can create mistrust or delay the sale.
Best practices
Now that you know the risks, here are a few best practices to protect yourself:
- Talk to a lawyer first. They can help you make sure the POA is legally solid and fits your state’s rules.
- Be clear about what you’re allowed to do. Spell out your powers so there’s no confusion about what you can and can’t handle.
- Keep the paperwork up to date. Double-check that the POA still reflects the principal’s wishes and is valid for the current transaction.
- Always put the principal first. Every decision you make should be in their best interest, not yours or anyone else’s.
- Write everything down. Keep good records of what you did, when, and why, in case anyone asks later.
- Keep everyone in the loop. Communication with family members, real estate agents, and others helps avoid misunderstandings.
Alternatives to using a power of attorney to sell property
If using a power of attorney doesn’t feel like the right fit, other options might work.
- Remote or electronic signing: If the seller is out of town but still mentally capable, they may be able to sign everything electronically without needing a POA.
- Living trusts: Putting the home in a living trust lets a trusted person manage or sell it, which can be helpful for long-term planning or if someone’s health is declining.
- Joint ownership: Sharing ownership with a spouse or family member allows them to sell the property if needed, though it can complicate estate plans.
- Conservatorship or guardianship: If there’s no POA and the person can’t make decisions, the court can appoint someone to handle their finances. However, this process is often slow and costly.
- Escrow instructions or pre-signed documents: If the seller is unavailable at closing but still mentally competent, they can sign everything in advance or give clear escrow instructions. You need to get approval from the title company for this.
Power of attorney vs. executor: What’s the difference?
The key difference is that a power of attorney gives you authority to act on someone’s behalf when they’re alive, while an executor takes over only after they pass away.
That means your POA authority ends when the principal dies. At that point, any assets they own become part of their estate and are subject to probate. This is the legal process of distributing a person’s property after death. Here’s a quick side-by-side comparison to help you choose the right person for each role:[4]
| Power of attorney (agent) | Executor | |
|---|---|---|
| When you can act | Only while the person is still alive | Only after the person has passed away |
| Who gave you the role | The person named you in a power of attorney document | The person named you in their will or the court appointed you |
| What you're responsible for | Managing finances, property, or other decisions on their behalf | Handling their estate: debts, assets, and making sure the will is followed |
| Typical situations where it’s used | The person is sick, aging, traveling, or can’t handle their affairs themselves | The person has passed away, and their estate needs to be settled |
| Can you sell their house? | Yes, but only if the POA document clearly says you can | Yes, but usually only if authorized in the will and approved by probate |
| Do you need court approval? | No, unless someone challenges your authority | Often yes, especially when selling property through probate or if there’s no will |
| When your role ends | As soon as the person dies, or if they revoke your power | When the estate is fully settled and closed |
Bottom line
A power of attorney to sell property can be incredibly helpful when the owner can’t be present or needs someone else to handle the details. But it also adds legal and logistical steps that must be handled carefully. Ensure the POA document is clear, current, and gives the agent the right authority.
Always act in the principal’s best interest and keep detailed records if you're the agent. With good planning and the right support, a POA can make the sale go smoothly and help avoid costly mistakes.
Real estate power of attorney FAQs
What is a POA in real estate?
A power of attorney in real estate lets someone else other than the owner handle things like signing documents or selling a home. It’s often used when the owner can’t be there in person or needs help managing the process.
Can I sell my parents' house with power of attorney?
Yes, you can use a power of attorney to sell property for your parents, as long as the document clearly gives you that authority. It should spell out what you’re allowed to do. You’ll want to double-check that it’s valid for the state and the specific property.
Can a power of attorney sell property and keep the money?
No, the money belongs to the person who gave you the power of attorney. You’re legally and ethically required to act in their best interest and follow their wishes. You cannot keep the money for yourself.[3]
