Can a power of attorney be signed electronically? This reader wants to give someone power of attorney but have it signed and notarized electronically.
Q: I recently signed a contract for the purchase of a home. I am traveling abroad soon and have given a financial power of attorney to a family member and I also gave them a durable power of attorney. Now I hear the title company in our purchase of the home may need a specific power of attorney for our purchase. Is it possible to provide a power of attorney electronically and have the document notarized electronically?
Can a Power of Attorney Be Signed Electronically?
A: So much has changed during the COVID-19 pandemic with respect to how real estate is bought and sold. Due to COVID-19, many real estate industry practices have changed. One change in particular has to do with remote online notarization. But first, we need to talk a bit about your power of attorney documents.
You were wise to try to set up a power of attorney document for yourself before traveling abroad. And, given some of the details in your question, we suspect that you have a lender that is setting up a loan so that you can complete the purchase of your home. More frequently than not, mortgage lenders want to see their borrowers have a specific power of attorney for the specific home purchase.
Sam recently had a lender that wanted the document so specific to the transaction that the lender wanted a definitive list of documents that the borrower was going to sign delineated in the power of attorney. That lender is an anomaly as most lenders will agree to accept a power of attorney that refers specifically to the property that is being purchased and contains language regarding the signing of loan documents and related documents for a home purchase.
So, if you have a lender and that lender wants a power of attorney tailored to your purchase, we understand what you are going through. Given all of that, the next question is whether you can sign a document and have that document notarized online. We’re happy to say that there are some places that allow homebuyers to have documents for a home purchase signed and notarized online, rather than require what is known as a “wet” signature. (We recently wrote more extensively about wet signatures at the beginning of the Covid-19 pandemic.)
How to Get Documents Signed and Notarized Online
You set up a time with a settlement agent, remote online notarization company or a party to your home purchase transaction and you simply sign your documents online. The notary watches you sign, usually through an online video call using a technology like Zoom, Skype, or Microsoft Teams, reviews your identification documents and records the transaction. The resulting document is an electronic document that has been notarized and even witnessed by third parties through this online process.
But, here’s the bad news. Most lenders will need to see the actual documents and will want to see the original signed and notarized documents. They may still not accept electronic signatures for some of these documents. So, please check with your lender and your settlement agent to see whether the remote online notarization can work for you in your situation. It’s possible that it can work but we don’t know for sure. We hope that COVID-19 brings some of these electronic improvements to the industry to allow buyers and sellers more flexibility in signing documents.
What to Do If the Lender Requires Hard Copies of Signed and Notarized Documents
As a fallback position, you should know that you can have the power of attorney prepared for you and sent to you via email. Once you have the document, you’ll have to get a hard copy printed out and sign it wherever you might be in the world.
That may be the easy part. The next part can be tricky: If you have access to a consulate of the United States, you can make an appointment and have the consular office notarize the document for you. If you can’t get to a consulate, you might be able to get the document legalized or authenticated by a government official or office that would be recognized in the state where your closing will take place and acceptable to the settlement agent and lender.
If you get the settlement agent and lender to accept the legalization or authentication of the document by the agent abroad, then you’ll have to overnight the document back to the United States as that original document will have to be at the closing.
We hope you can use the online method but if you can’t at least there’s a way for you to give that power of attorney to someone else while you are traveling abroad.