Why Does the Bank Want Something More?
So Aunt Gertrude has named her Niece Milly as her attorney in fact through the power of attorney document. Suppose Aunt Gertrude wants to sell her house, but because of infirmity, she is unable to go to the bank to take care of any financial arrangements, or to the realtor’s office for the closing. Is the power of attorney document she already executed sufficient to allow Milly to show up at the closing and to sign the myriad of papers required to sell a home today?
The answer is “probably.”
Recently (within the past two years), some banking and other financial institutions are requiring very specific language in a power of attorney document in order to complete real estate transactions. At first blush, the document the bank is handing you looks nearly identical to the fully executed power of attorney document you handed to them (just before they refused it). These institutions are trying to protect themselves.
If Aunt Gertrude is not careful, she may not be able to sell her house after all. Not because she doesn’t want to sell it, or because she doesn’t have a willing buyer, or because the buyer does not have the money. No, it could be because the power of attorney document, though it was thoroughly written and is perfectly legal, does not make this particular financial institution happy.
So what is the moral of the story? If you or a loved one is selling or buying real property (i.e., real estate with or without a building on it), show the power of attorney document to the lender at least thirty days in advance of the closing date. That way, if your lender wants to have you execute their own version of a power of attorney document, you will have time to take the “special” document to your attorney for his or her review and execution, and the closing date will not have to be rescheduled (and the sale of Aunt Gertrude’s house).
Keep sending us your feedback. We will try to incorporate some of your questions into the upcoming adventures of Aunt Gertrude and her niece Milly.