When you sell real property, the sale is recorded by changing the deed to the property. For various reasons, a person may want to grant the power to sell the property to an agent under a power of attorney. State laws vary about the requirements for changing a deed and creating a valid power of attorney, but all states allow a power of attorney to be used to transfer real estate.
Power of Attorney
An agent acting under a power of attorney can sell or transfer real property on behalf of the principal – the person granting the powers – if the power of attorney is properly drafted. The authority to sell real estate may be the only power granted by the power of attorney, one of several powers enumerated in the power of attorney or it may be included under a general power of attorney that grants broad authority without enumerating specific powers. For example, a general power of attorney could say that the agent has the authority to act to the full extent that the principal is permitted to act by law, which would include selling property.
Whether an agent has specific power to transfer the principal’s real estate or more general powers, he has a fiduciary duty. This means the agent must always act in the principal’s best interests. The agent cannot sell the property for far less than it is worth simply because it benefits the agent. If the sale itself is not in the principal’s best interests, the agent cannot sell the property.
Transfers of real estate are recorded in deeds, so the agent who sells the principal’s interest in real estate must sign a deed or change a deed to reflect the sale. A warranty deed may be used if the principal – through his agent – is guaranteeing he owns title to the property and has the right to convey it to someone else. A quitclaim deed may be used if the principal wishes to give any interest he might have in the property but does not want to guarantee that he owns any interest at all. Typically, real estate sales use warranty deeds.
Deeds must be recorded with the appropriate county recorder’s office, depending on your state’s laws. A copy of the power of attorney may also be required to be recorded to document the agent’s authority to sell or transfer the real estate. All deeds must be completed and signed in compliance with state law and local recording rules which may include margin size and notarization language.