Three days prior to settlement, the Buyer or Seller casually informs you (the real estate agent or loan officer) that he will not be in town for closing. He wants his best friend to represent him (as attorney-in-fact) at settlement and asks you whether the Power of Attorney he purchased at Office Depot will satisfy the settlement company or the lender. The following list of “essential elements” typically required in an enforceable power of attorney should help you answer his question with reasonable confidence:

1. Most settlement companies prefer (if not require) that the power of attorney be a “specific” power of attorney as opposed to a "general" power of attorney. This means that the duties and powers of the attorney-in-fact as set forth in the instrument specifically relate to the purchase (or sale) of the subject property. This differs from a general power of attorney through which the principal vests the attorney-in-fact with broad and unlimited powers that may touch upon all or many aspects of business and personal life.
2. The power of attorney should be dated.
3. The power of attorney should clearly set forth the name of the individual who has been chosen to represent the principal at settlement. Note that the attorney-in-fact named in the power of attorney cannot transfer his power to yet another party.
4. The Seller’s power of attorney should contain, specifically, the power to sign a deed.
5. The power of attorney should contain a legal description of the property that is the subject of the transaction and should set forth the street address as well.
6. The power of attorney should contain a disability clause which provides that the power of attorney will remain effective despite the fact that the principal may later become disabled, or incompetent.
7. The power of attorney must bear the original signature of the principal and this signature must be notarized. If the power of attorney is signed outside of the United States, additional certifications will be required.
8. Note that in cases where a purchaser uses a power of attorney, the lender may require a copy to be submitted for approval. In some cases—i.e., VA loans—the lender may require the use of a specific format for the power of attorney that includes terms such as loan amount, interest rate, loan term, and other items.
9. If your client does indeed provide his own power of attorney, it is critical that you have both the settlement company and the mortgage lender review it as soon as possible. Should either the settlement company or lender reject the document that your client has produced, you may still have enough time prior to settlement to have an acceptable power of attorney drawn up and signed. In such a case, feel free to call Beltway Title for assistance.