Which Power of Attorney Is Used for Real Estate Transactions?

 Posted on September 09,2024 in Real Estate

Real estate transactions typically involve a lot of paperwork, time, and attention to detail. This can be cumbersome for the parties involved, especially if they are unable to be present. A buyer, for example, may be trying to purchase an estate overseas, or a seller may be involved in multiple real estate transactions at the same time.

In such cases, it is relatively common for either party to use a power of attorney. This means that the buyer or seller authorizes someone else — called an "agent" — to act on his or her behalf. This might allow the agent to make decisions and sign papers for the party, referred to as the "principal."

However, there are several types of power of attorney, and not all of them may be appropriate to use in a real estate transaction. The best way to determine which power of attorney you should use is to consult a Texas estate planning lawyer who can advise you. In this article, we will explore each kind of power of attorney so you can get a preliminary understanding of which might be the best fit.

General Power of Attorney

A general power of attorney will give an agent broad authority to act on your behalf. This authority may include:

• Signing contracts on your behalf
• Opening and closing bank accounts
• Managing your property and assets
• Making decisions about your medical care

Depending on how the agreement is drafted, a general power of attorney may end at a predetermined time, once a specific task has been completed, when the principal becomes incapacitated, or when the principal dies.

Limited Power of Attorney

As its name suggests, a limited power of attorney confines the agent’s authority to a specific task, matter, or event. For example, you might grant limited power of attorney to someone to open an overseas bank account for you or to buy or sell property on your behalf.

While a limited power of attorney may be suitable for managing a real estate transaction, it might not be ideal if you are involved in multiple transactions and need continuous management.

Durable Power of Attorney

A durable power of attorney, also called a statutory power of attorney, stays in effect even if you become incapacitated. A principal who is elderly or suffers from a chronic health condition, for example, may wish to grant an agent durable power of attorney to continue to manage real estate transactions uninterrupted. A durable power of attorney ends when it is revoked, or the principal dies.

Under Texas law, an agent with a durable power of attorney may only make decisions related to finances. He or she cannot make medical decisions for the principal.

Springing Power of Attorney

A springing power of attorney is triggered by a certain event. For example, a principal might arrange for a power of attorney to take effect only if he or she becomes incapacitated. This can be useful for someone who wants to manage real estate transactions himself or herself while able to but does not want them to be affected by his or her incapacitation.

Contact a Wilson County, TX Estate Planning Attorney

Choosing the right power of attorney for real estate transactions should be done with extreme care. Consult with an experienced Bexar County, TX power of attorney lawyer who will properly advise you and draft the appropriate agreement. We take great care in making sure our clients grant powers of attorney that exactly match their needs. Schedule a free consultation with Geoff Mayfield, Attorney at Law by calling 210-535-0870 today.