Picture this: you were tasked to be the agent for your parents’ Power of Attorney to manage their affairs, and you said yes, even if you’re not really sure what your responsibilities are, nor what it means to be one.
A power of attorney (POA) can vest a wide range of authority, including representation and decision-making in financial and legal matters such as banking, making investments, and, yes, buying and selling property. As long as it is indicated in the document, then you have the capacity to do just that. However, don’t think that a POA gives you free rein to do anything you want. It comes with certain responsibilities that must be upheld; otherwise, you can be held legally liable.
Every POA is different. While some may give broad powers to the agent, others may even forbid the sale of property outright. What they all have in common is instructions that are reflective of your parents’ (i.e., the principals’) wishes.
In this article, we’ll go over the key details of using a power of attorney in real estate transactions, your duties and responsibilities as an agent of your parents.
What Is A Power Of Attorney?
A power of attorney (POA) is a legal document that allows the agent, also known as the attorney-in-fact, to act on behalf of the principal. This document outlines everything the principal grants the agent to do on their behalf. This is mainly used for long-term planning, preparing in the event where the principal is incapacitated due to illness or old age. The principal engages in the creation of the power of attorney and chooses their own agent, normally a family member or a trusted friend, who will serve as their proxy for important matters such as health and finances.
An important part of the creation of a power of attorney is that the principal is of sound mind and in a clear mental state. If this is no longer the case, then granting power of attorney becomes legally impossible. In fact, most power of attorney ends once the principal has become incapacitated and can no longer make their own financial, legal, and health decisions, unless it is a special type of POA: the Durable Power of Attorney, which allows for the continued representation of the agent.
In real estate, a power of attorney is commonly used when an elderly homeowner decides to move into assisted living, moves closer to family, or if the principal is out of state and can’t personally handle the sale of their property.
If you have Power of Attorney, you may be able to sell a house on behalf of a loved one, and Lorain County Homebuyers can help by providing a fast cash offer and a simple selling process.
Common Types of Power of Attorney
There are five common types of powers of attorney, and knowing which one you have is important, as they serve different functions and grant different levels of authority to the agent.
- General Power of Attorney – This grants the broadest authority out of the five and allows the agent to represent the principal in all of their financial, legal, healthcare, real estate, and business affairs. Of course, the principal can still put limitations or clauses that should be followed.
- Limited Power of Attorney – This grants authority for a specific task, transaction, or decision. In real estate, this is often used to authorize the grant to sell a particular property and nothing more.
- Durable Power of Attorney – the defining feature of a durable power of attorney is the length of its validity. It allows the agent to continue acting on their behalf even in the case of illness or incapacitation, as mentioned above.
- Nondurable Power of Attorney – Conversely, a nondurable power of attorney becomes invalid if the principal becomes incapacitated.
- Springing Power of Attorney – This only goes into effect once specific conditions are met, usually when the principal is declared incapacitated according to the terms written in the document.
Do note that all types of power of attorney can be revoked at any time as long as the principal is of sound mind.
Fiduciary Duty of An Agent (Attorney-in-Fact)
Before asking whether or not you can sell your parents’ home, it’s first essential to know your obligations as an agent. As the agent representing your parents, you now have a fiduciary duty to fulfill your role.
A fiduciary duty is your legal responsibility to act with good faith and only in the best interest of the principal. Outside of the authority, the power of attorney grants you, you are guided by this duty to only make decisions that benefit the principal and not yourself. Even if the power of attorney gives you broad powers, every action, including the decision to sell property, must be clearly for your parents’ benefit.
You’re also required to avoid conflicts of interest. You cannot use your authority for personal profit or make decisions that benefit you over your parents. You must always maintain transparency and accuracy when managing finances or selling real estate, especially since you’re not the owner. The Ohio POA law provides protections against financial abuse of adults who can no longer manage their affairs.
If you fail to carry out your duties, you can get in legal hot water. You can even be held personally liable for financial losses, such as being required to repay funds, removed from your position, and, in certain cases, face civil or criminal penalties.
With a Power of Attorney, your duty is to prioritize your parents’ best interests. If selling their home is the right choice, reach out to Lorain County Homebuyers, a reliable cash buyer, for a fair offer and a simple, hassle-free sale.
How To Know If You Can Sell Your Parents’ Home With a POA Document
If you answer yes to the following questions, then it’s likely within your authority to sell your parents’ home. Just remember, having authority is only part of it; the sale must also align with your fiduciary duty and be in your parents’ best interests.
1. Is the Power of Attorney Valid?
Before anything else, you need to confirm that the Power of Attorney is legally valid. In Ohio, a power of attorney must be signed by the principal or signed at the principal’s direction in their presence. The document must also be acknowledged before the notary public to be legally effective. While witnesses are not always required for a financial Power of Attorney, some institutions may request additional verification before honoring it.
The principal must be at least 18 years old and mentally competent at the time of signing. This means they understood what they were signing and were not under duress, coercion, or undue influence.
2. Is the Power of Attorney Recorded in Ohio?
When it comes to real estate, a signed power of Attorney isn’t always enough. In Ohio, a power of attorney can’t just be recorded in any county. It has to be recorded in the same county as the property mentioned in the document. In these situations, it should be recorded in Lorain County. If the POA wasn’t recorded correctly, the county might not process the deed trade of the property, which could delay or hinder the sale.
The recorded power of attorney will also be used to check that the original copy you hold matches the one recorded in the county when you’re ready to sell. Any missing pages, alterations, or incomplete notarization can cause issues during closing. Title companies and buyers will usually review the power of attorney carefully to confirm that it explicitly grants authority to handle real estate transactions.
Before listing or selling the property, verify with the county recorder or title company that the Power of Attorney has been properly recorded and meets Ohio’s legal requirements. Taking this step early helps avoid last-minute complications at closing.
3. What Type of Power of Attorney is it?
Now that you know that the power of attorney is valid and properly recorded, you must determine what type it is, as this allows you to know when it becomes effective and what authority it grants.
Some POAs go into effect as soon as they are signed, while others don’t go into effect until there is a triggering event. So before you can act on the power of attorney, you must have solid proof that you meet the requirements, depending on the type.
The next step is to understand what powers the power of attorney gives you. If it’s general, then you most likely have the freedom to act in the best interest of the principal. If it’s limited, then your responsibilities are specific and clearly indicated.
4. Does It Explicitly State You Can Transfer Property?
You must carefully read through each clause in the power of attorney. First, you must confirm that you are stated as the agent in the power of attorney and that everything is in order. This shouldn’t be an issue since you would have signed the document in the beginning, but it’s best to double-check. If you’re not the agent listed in the power of attorney, then you don’t have the authority to act as a proxy!
Once you confirm that you’re legally the agent, the next step is to review the authority granted to you. Find wordings that indicate that the Power of Attorney clearly authorizes you to handle real estate transactions, to ensure that everything that you do is above board, and you are not overreaching your authority.
This is a legal agreement, and the language matters. General authorization isn’t enough to process a real estate transaction through a power of attorney. The document should specifically state that you have the power to sell, convey, transfer, or otherwise dispose of real property. Look for phrases such as “execute deeds,” “transfer title,” or “manage and sell real estate,” which generally indicate the ability to sell the property.
If proper and clear language is not used, a title company may refuse to proceed with the sale. In such cases, avoid making assumptions or interpreting vague language on your own. If the authority to sell real estate is not clearly written, you should consult a real estate attorney before doing anything.
5. Has It Been Revoked?
Finally, even if you’ve said yes to questions one through four, none of that matters if the power of attorney has been revoked. You may think that the copy of the POA that you have is still valid, not knowing that the power of attorney was already revoked by the principal.
Your parents have the right to revoke the power of attorney at any time as long as they do so while they are of sound mind. It can be done in writing, and once the revocation happens, the authority of the agent is immediately terminated. The power of attorney is also automatically revoked once your parent passes away or is incapacitated, unless it is a durable POA.
In the unlikely event that you missed the mail informing you of the revocation, if any, you can check the county recorder’s office, where it should have been filed as well. If everything is clear and no revocation is forthcoming, then all systems are a go.
As long as you act with fiduciary duty, you should be fine, but it’s best to err on the side of caution and do your due diligence before making a major decision like selling your parents’ home. Make selling your parents’ home simple and fast. Investor home buyers in Elyria and other cities in Ohio offer fair cash offers and handle everything for you.
What Happens to a Power of Attorney at Death?
Once the principal passes away, the Power of Attorney immediately loses its validity. Your authority as an agent ends at the moment of death. A power of attorney only grants power while the principal is alive.
In this case, the property becomes part of the principal’s estate, where the executor or a court-appointed administrator will be responsible for administering the estate.
If the principal died with a valid will, then it will be passed down to the beneficiary named in the will. However, if no will is in place, then the property will go through the probate process. During the probate process, the deceased’s estate is distributed according to Ohio’s intestate succession laws. This process can take months, so most people try to avoid probate by making a will or putting the property in trust.
It’s important to understand that once the principal dies, you cannot continue acting under the Power of Attorney. Any decision regarding the property must be handled through the probate process.
Process Of Selling A Home Through Power Of Attorney
Step 1: Verify the Power of Attorney Documents
Go through the proper means to ensure that the power of attorney is valid before deciding to sell your parents’ home. After carefully reviewing important details such as the effective date, whether the document is durable, the exact authority you were granted, and any limitations placed on your powers.
To ensure that the sale will go smoothly, it’s recommended to work with a real estate lawyer when reviewing the power of attorney. As the power of attorney requires specific language and uses legal jargon, it can be complex. Even if the document appears to allow the transaction to proceed, having a lawyer confirm its validity can help avoid complications later.
It’s best to consult a lawyer from the very beginning rather than when complications arise because by then, not only has your sale surely been delayed, but it will also be more difficult to resolve issues at this point. Doing your due diligence before you begin will help ensure a smoother transaction and protect both you and your parents.
Step 2: Have the Home Appraised
Selling the property for no less than its fair market value is part of your fiduciary duty as the agent. Hiring a professional appraiser will provide clear documentation that the property was properly evaluated and listed at a fair price.
This is a crucial step for a successful home sale, as this can help prevent disputes from family members or other interested parties who may later question the sale price.
In certain situations, a property may sell below fair market value. However, this must be done in good faith and clearly for the benefit of the principal, such as when a quick sale is necessary for medical reasons. In this case, you have to provide evidence that selling for less is the right decision and won’t negatively impact your parents.
Step 3: Consult With A Real Estate Professional
Selling property is already a demanding process, and when you’re acting under a Power of Attorney, it can get overwhelming fast. This is where working with a realtor can make your life easier.
A licensed real estate agent already has a trained eye to look over the paperwork, and you can find plenty who have experience handling transactions involving Power of Attorney. These sales do involve more documentation and tend to get closer scrutiny from lenders and title companies, so you’d want to make sure that everything is on the up and up.
For an alternative option, you can also consult with a cash home buying company. They make the process easier and are experts at selling homes quickly. Either way, an experienced professional will understand how to navigate the added complexities of a Power of Attorney sale and prevent unnecessary delays.
Step 4: Prepare The Home For Sale
Moving the focus from the power of attorney, you actually have to do all the work that comes with a home sale. Since you probably haven’t lived in the property for years, this can be a major undertaking. Personally handling the cleaning, organizing, and packing of personal belongings takes time and detailed coordination.
Not only that, making minor repairs such as replacing busted light bulbs and fixing leaky faucets, and sprucing up your landscaping a bit can significantly improve the property’s perceived value. You can even add a fresh coat of paint or power wash your facade to improve curb appeal. Showing potential buyers the value of the property allows you to fulfill your fiduciary responsibility of selling the property at a good price–possibly even above market value.
Giving time and effort to prepare the home for sale can make a noticeable difference in both the speed of the sale and the final sale price.
Step 5: Close The Sale
When you close a sale with a Power of Attorney, it does involve more paperwork than a conventional transaction. It’s because you’re signing on someone’s behalf, making lenders, title companies, and attorneys more conscientious during the transaction. Additional paperwork, such as a certified copy of the Power of Attorney, identification, and an affidavit to confirm the validity of the power of attorney, may be requested to ascertain your authority.
After the deed of sale has been signed by both parties, you must handle the sale proceeds, which are strictly for the benefit of your parents, according to the stipulations of the POA.
Selling a home through a Power of Attorney can be complex, but cash home buyers in Parma and nearby cities in Ohio make it simple by offering fast cash, handling the paperwork, and ensuring the sale benefits your parents without delays.
Final Thoughts: Can I Sell My Parents’ House with Power of Attorney in Elyria, Ohio?
The answer is: yes, as long as you have a valid power of attorney that explicitly allows you to do so!
However, before proceeding, it’s best to review the document or consult with a real estate lawyer. Doing it this way allows you to protect yourself and your parents and ensures that the process is all legal and transparent.
Need to sell fast and for cash? Lorain County Homebuyers simplifies the home sale process by buying properties as-is and for cash. We also have vast experience dealing with properties in all kinds of situations, such as those involving POAs and their added complexities.
Receive your competitive, fair cash offer now! Contact us at [number] or fill out the short form below.
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