What you need to know: Selling a house with a Power of Attorney

Power of Attorney

Selling a house can be a stressful and time-consuming task with many moving parts. While there are professionals available to help you, it is important you understand the process so that you can seek the assistance you need. One key element in the selling process is executing a Power of Attorney (POA) where required. A POA designates someone else’s authority over property or other personal matters should physical or mental disability prevent you from making decisions —in this case when it comes to selling your house. 

In this post, we’ll discuss what you need to know regarding using a POA for selling a house. We outline why you need one in certain circumstances to how you go about selecting someone who will serve as your Power of Attorney while carrying out the instructions outlined in the document. So read on if you want more detailed information about Powers of Attorney and how they apply to real estate transactions.

To sell a property in Alberta, you would typically need a specific type of power of attorney called a “Property Power of Attorney” or “Real Estate Power of Attorney.” This legal document grants someone else the authority to act on your behalf in real estate matters, including the sale of property.

To obtain a power of attorney to sell a property, you will need to follow certain steps and requirements. Here’s a general guide to help you understand the process:

Choose an attorney or agent: Select someone you trust to act as your attorney or agent in the power of attorney document. This person will have the authority to sell the property on your behalf.

Consult a lawyer: It’s advisable to consult with a lawyer who specializes in real estate or estate planning. They can ensure your Power of Attorney is legally sound and meets all the necessary requirements in your jurisdiction.

Draft the power of attorney document: Work with your lawyer to draft the power of attorney document. The document should clearly state your intention to grant your attorney or agent the authority to sell the specific property.

Specify powers and limitations: Clearly define the powers and limitations you want to grant to your attorney. Specify that their authority is limited to selling the property and any related matters, such as signing necessary documents, negotiating terms, and transferring ownership.

Include property details: Provide detailed information about the property, including its address, legal description, and any other relevant details that help identify it uniquely.

Sign the document: Once the power of attorney document is drafted, review it carefully and make sure you understand its contents. Sign the document in the presence of a notary public or a witness, as required by your jurisdiction’s laws.

Notarize the document: Depending on your jurisdiction, you may need to have the power of attorney document notarized. This typically involves signing the document in the presence of a notary public who will validate your identity and witness the signing.

Provide copies to relevant parties: Make copies of the executed power of attorney document and provide them to the relevant parties involved in the property sale, such as real estate agents, lawyers, or title companies.

In conclusion, it is important to understand all the nuances around a Power of Attorney and why you may need one for real estate transactions.

A Power of Attorney is an essential document to have when it comes to managing any real estate transactions. Whether you are refinancing a current property or purchasing a new one, having a Power of Attorney already set up makes the process easier and smoother. With the various options you can choose from, enabling someone else to act on your behalf if needed is more convenient and just as secure when you use the right person for the job. If you would like complete assurance that your Power of Attorney is legally binding and accurate, contact a real estate lawyer at Summit Legal Group today for help in setting one up.

Don’t wait – take control of your finances by creating your own personal Power of Attorney now. The steps are simple and the benefits immense, so why not get started? Reach out to us to guide you through the process and craft a legally sound Power of Attorney tailored to meet your needs. Act now for peace of mind tomorrow!

 

Understanding Title Insurance: What Home Buyers Need to Know

Title insurance

When buying a new home, you want to protect your ownership from any legal issues that may arise. This is why title insurance is crucial for any homebuyers.  Title insurance provides protection in case there are any issues with the title to the property you are purchasing. This may include any legal claims or disputes that may arise after purchase. But not everyone understands what title insurance is, how it works, and why you it is important. In this blog post, we will explore the basics of title insurance and why it’s crucial for homebuyers.

What is title insurance?

Title insurance is an insurance policy that protects you against any losses that may arise from mistakes or defects in the title of the property you are purchasing. It provides coverage for a range of potential issues, such as unknown liens, fraud, forgery, or other issues that may arise with the title of a property.

Why do you need title insurance?

Title defects can happen for a range of reasons, including errors in public records or mistakes in previous transactions. Without title insurance, you could face significant financial and legal consequences if a claim is made against your ownership of the property. Title insurance can protect you from these risks, giving you peace of mind and ensuring that you can enjoy your new home without any worries.

A title insurance company issues the policy after a thorough examination of the property’s title records. This ensures there are no issues or defects. If any defects are discovered after the policy issuance, the title insurance company will provide financial compensation to cover any losses incurred by the property owner or the mortgage lender.

In some situations mortgage lenders may require title insurance as a condition for issuing a loan. It is a one-time expense paid at the time of closing. The policy remains in effect for as long as the policy holder owns the property.

How does title insurance work?

You can purchase title insurance during the closing process and the policy protects you as long as you own the property. The cost of the policy varies depending on the location of the property and the purchase price. Typically, homebuyers will pay a one-time premium for the policy at closing.

What does title insurance cover?

Title insurance covers potential issues that may arise with the title of the property. They can include unknown liens, unpaid taxes, fraud, forgery, and more. It also provides protection for any legal expenses that may occur, such as hiring a lawyer to defend your ownership in case of a claim.

What are the benefits of title insurance?

Title insurance protects your investment and gives you peace of mind, allowing you to focus on enjoying your new home. It also reduces the risk of any legal disputes regarding your ownership, which can save you significant financial stress and potential legal battles in the future.

Buying a new home is a significant investment and one that requires careful consideration. Title insurance is an essential part of the homebuying process. It can provide valuable protection for any potential issues with the property title. As a homebuyer, it’s crucial to understand what title insurance is, how it works, and the benefits it can provide for you and your investment. Therefore, before you close on your new home, make sure you have coverage with a title insurance policy.

Still have questions about title insurance? Your lawyer will be happy to review it with you during your meeting when you’re signing your documents. This ensures you can have the peace of mind  and confidence in your choices.

The Real Risks of Being a Guarantor for a Mortgage

“I’ve just been asked to sign a guarantee for a mortgage, what does that mean?”

A guarantee is a legal promise or assurance made by one party (the guarantor) to another party (the beneficiary) that a particular obligation or debt will be fulfilled. Essentially, a guarantee is a form of security that provides the bank or lender with some level of protection in case the person responsible for the obligation or debt is unable or unwilling to fulfill it.

It’s not easy to get a mortgage, and some people may require a guarantor to meet the mortgage requirements. A guarantor is a person (i.e. you in this situation) who takes full responsibility for the mortgage if the borrower is unable to make payments. While serving as a guarantor can help your loved ones get a mortgage, it’s important to understand and evaluate the risks associated with being a guarantor. Before signing any papers, it’s essential to consider the worst-case scenario and what it might mean for your finances. In this blog post, we’ll discuss what it means to be a guarantor and explore the risks you may encounter.

1. Guarantor Risk Types and Relations

A guarantor takes full responsibility for a borrower’s mortgage if the borrower is unable to meet their payments. However, being a guarantor entails some risks, so it is important to consider these risks before being a guarantor. First, assess your relationship with the borrower. A guarantor’s risk varies depending on their relationship with the borrower. If the guarantor is the borrower’s parent, there might be a higher risk of involvement. Lenders may assume that parents are duty-bound to keep their children afloat financially. On the other hand, if the relationship is more distant (e.g., a co-worker or a friend), the risk may be moderate. In either case, it’s important to know the borrower’s financial situation before agreeing to be a guarantor.

2. Financial Risks

Apart from considering the borrower’s financial situation, it’s important to assess your financial position before becoming a guarantor. Make sure you can afford to meet the payments if the borrower defaults. Being a guarantor means you are legally responsible for the borrower’s debts, which may cause financial problems if you do not prepare in advance. You also risk damaging your credit score if the borrower misses payments, affecting your credit score. The credit reference agencies will link your financial details with the borrowers’. This may even prevent you from getting a mortgage, as lenders may see you are committed to someone else’s loan.

3. The Benefits of Being a Guarantor

Being a guarantor may have some benefits, particularly if the borrower meets their mortgage payments regularly. Acting as a guarantor helps build trust among people in your life, mainly if they rely on your support and guidance. Furthermore, the borrower can get mortgage access they wouldn’t have otherwise had, such as renting a home, buying a property, or paying for college. It can also help you prepare for potential financial responsibilities, such as helping your children, a family member or even a friend.

4. Legal Advice

Before signing any document, it’s important to seek legal advice. Legal advice helps identify and avoid any financial pitfalls associated with being a guarantor. These precautions include reviewing any legal documents and contracts, contacting the legal advice helpline to discuss the impact of the guarantor arrangement, assessing the risks to your credit score and budget, and ensuring that you understand the legal rights and responsibilities that you’ll have as a guarantor.

Becoming a guarantor for someone’s mortgage is a massive responsibility. It’s important to understand the risks, benefits and seek legal advice before signing any papers. Assess your financial position and ensure you can afford to take on someone’s mortgage payments before committing. Additionally, consider your relationship with the borrower, as this could impact your legal responsibilities. Ultimately, being a guarantor can be a rewarding experience. It can be a significant way to help someone closest to you, but it’s also important to remember that being a guarantor comes with financial risks and legal obligations. When in doubt, seek advice from a trusted financial advisor.

Need more clarification before signing anything on the dotted line? Reach out to us for assistance and advice and we would be happy to help!