Tips for out-of-town buyers at settlement
[Editor's note: Fannie Mae recently issued new restrictions on use of Power of Attorney. Please read this article and contact our office with any questions.]
If you must use Power of Attorney, please contact our office.
Please keep in mind that attending settlement is always the best solution, but we understand that sometimes a situation might arise where you will be out of town on the closing date.
If you are the buyer and, you cannot attend settlement, here are some potential solutions.
Solution #1: Change your travel plans
Let’s start with what might be the most obvious, but not always a plausible solution. Of course if you are out of town for a work conference or an event that cannot be changed or delayed, this is not possible. However, surprisingly, we often find out that the plans could have been changed, but the buyer was told that not attending was "not a big deal."
Aside from not attending the closing itself, keep in mind that a final walk-thru inspection is typically conducted the morning of or the day before closing and this is your last chance to make sure that what you are buying is in order. If plans can be changed in order to attend closing, it is always the best solution.
Solution #2: Change the closing date
If moving the closing up or back by a day will allow for the buyer to attend closing, most of the time the seller will be willing to make the change. Just because a date was written in the contract (closing date November 20) doesn’t mean that the seller will not be willing to allow for a one or two day delay if that will help with the closing.
Solution #3: Use a Power of Attorney
Ok, so now we’ve dealt with the obvious solutions, but if you really cannot attend, the next best solution is to appoint a Power of Attorney. For the purchase of real property, a specific Power of Attorney should always be used.
Also, Maryland and the District of Columbia have very specific requirements for the use of a Power of Attorney in regards to real property.
So do not expect that the General Power of Attorney that you bought online or had prepared by an estate attorney will work for your closing. We have posted on our website Power of Attorneys that are valid for Maryland, the District of Columbia and Virginia.
If you are intending to use a Power of Attorney, notify the title company and the lender as soon as possible. Both the title company and the lender will want to review the Power of Attorney in advance to make sure that it can be used. Finally, make sure that the person signing on your behalf is somebody that you trust, since he or she is signing documents that will commit you to a loan, and that he or she is prepared to do a lot of writing.
A Power of Attorney typically has to write the following for each signature: John P. Doe by Jane P. Doe, his Attorney in Fact. That’s a lot to write on anywhere from 60 to 100 documents, depending on the loan type!
Solution #4. See if the closing documents can be sent to you in advance so that you can close remotely
This is by far the most difficult solution and should really only be used as a last resort. This solution is only feasible if you are still in the United States. If you are traveling abroad, the Power of Attorney is a much better option. To sign the documents remotely, the lender would have to send the documents early enough for them to reach you via FedEx, then you would have to sign before a notary prior to the closing date and return the documents by closing.
As you can imagine, if you are outside the United States, it becomes difficult to coordinate the timing of the documents. But even if you are in the U.S., this option complicates things and really should be avoided if at all possible.