Few things in life go exactly as expected, and that includes enormous, life-changing transactions like buying or selling a home—which can hinge on physically showing up with a pen to your closing.
Whether you’re dealing with a busy schedule or a sudden medical issue, unfortunately, you may not be able to attend a critical meeting or make a decision when needed. That’s why a real estate power of attorney is such a useful tool.
Setting up a power of attorney (POA) may seem like an onerous additional step, but real estate transactions are important enough that you have to ask yourself: Is not having one worth the risk? You never know what can happen, and if you’re operating without the backup of a POA, a carefully constructed deal could fall through.
Why power of attorney for real estate is so powerful
The term “power of attorney” often makes people think of worst-case scenarios or complex legal proceedings. For real estate purposes, it’s much simpler than most people realize.
“The power of attorney (POA) is probably one of the most neglected tools for protecting real estate investments,” says Evan Harlow, a real estate agent with Maui Elite Property. “It authorizes someone to purchase, sell, refinance, or otherwise manage property if the owner becomes incapacitated.”
In fact, a POA has myriad use cases that go far beyond falling ill or suffering an injury at the last moment. Maybe a work trip or military deployment that takes you out of the country, or a busy schedule gets in the way of showing up physically to a transaction. Perhaps you live in a different state, and don’t want to travel back and forth for routine dealings.
Another increasingly common scenario involves aging parents who want to proactively give their adult children authority to handle property decisions. Whether it’s selling the family home to move into assisted living, managing rental properties, or simply having backup support for routine matters, elderly homeowners may find that setting up a real estate POA provides peace of mind for the whole family while they’re still fully capable of making decisions.
“You don’t have to wait for a crisis to prompt your action,” says Harlow. “A POA is not just a legal formality, it’s a safeguard that ensures your real estate remains an asset, not a liability, when life takes an unexpected turn.”
The downsides of not having POA in place
Operating without a POA in place isn’t a death sentence for any deals in the works, but it can certainly make your life more complicated, expensive, and time-consuming when it doesn’t have to be.
Whether you’re buying or selling a home, not being able to attend a closing could be the difference between the deal getting completed or falling through. It can mean breach of contract lawsuits from other parties, penalties from delayed closings, or loss of rate locks on mortgages. A property that was once set to sell may sit vacant, piling up maintenance fees and taxes.
And if you are incapacitated, your family may need to petition the court for a guardianship or conservatorship just to push a simple transaction through.
“I witnessed a family taken by surprise when a homeowner who had a stroke did not have a POA, so his property sat vacant for months while courts determined who would have guardianship,” says Harlow. “In the meantime, mortgage payments had piled up and equity had slipped away unnecessarily.”
All of these ramifications can add up to thousands in legal fees and lost value. Meanwhile, the price of setting up a real estate POA varies but is rarely more than a few hundred dollars.
How do you set up a POA?
Setting up a power of attorney for your important decisions is usually worth the effort. You can choose between a comprehensive POA that covers all your affairs or focus specifically on real estate for now. The key is understanding your options upfront.
“Not all powers of attorney serve the same purpose,” explains Tyler Livingston, an estate planning attorney at Coker, Robb, & Cannon. “A general or financial POA gives your agent broad authority over your financial and legal affairs. A special or real estate POA, on the other hand, is much narrower, only allowing your agent to handle property-related matters like buying, selling, refinancing, or managing real estate. Think of it as tailoring the authority to fit exactly what’s needed.”
To get started, find an estate planning attorney through online searches, referrals, or your state bar association—most charge $200-500 for basic POAs. Online legal services are cheaper, but an attorney ensures it meets your state’s requirements.
Your attorney will help you choose a trustworthy agent and decide if the POA takes effect immediately or only when you’re incapacitated, also known as a “springing” POA. The document must be “durable” to remain valid if you lose mental capacity and should clearly outline property powers like buying, selling, or managing real estate. Sign it before a notary and required witnesses, keep the original somewhere safe but accessible, and record a copy with the county where your property is located. Be sure to give copies to your agent and financial institutions beforehand to avoid delays.
Your power of attorney can be almost anyone who meets basic legal requirements: They must be at least 18 years old, mentally competent, and not under legal guardianship themselves. The most common choices are spouses, adult children, siblings, trusted friends, or professional advisors like attorneys or accountants.
Now, with a properly drafted real estate POA on the books, “your chosen agent can sign closing documents, oversee necessary repairs, file insurance claims, and pay property taxes or HOA dues,” explains Livingston. “Your home stays protected, your bills stay current, and your equity is preserved.”
A real estate power of attorney isn’t just paperwork—it’s insurance for one of your biggest investments. Whether you’re facing a predictable life change or simply want to be prepared for the unexpected, setting one up now means you’ll never have to worry about a medical emergency, work conflict, or family situation derailing your property deals. The small upfront cost and effort pale in comparison to the financial and legal headaches you’ll avoid down the road.