What are the risks of my agent signing for me at closing ?

15 Replies

Hi everyone, I've had closing for a rental property get pushed back due to a series of inspection issues that now overlaps with me being out of town. My real estate agent is saying I can sign my HUD1 and a few other disclosures ahead of time and then he can sign for the rest of the documents at closing. What are my risks when it comes to having someone else complete the documents for me? Although I would like to think this is moving somewhat in the direction of automating my business I would like to get a sense for any risk associated with this or things I should be considering.

Any input would be much appreciated!

@Dave Bopp You might talk with your title company or attorney about this.  Here in MA, I believe that you would have to execute a power of attorney for another party to close for you.

Some states (not MA) allow for a notary to close.  At least that way there's verification of identity.  Some (not MA) allow e-signatures.  If PA allows something like Docusign, you can sign on your cell phone.

I'd just worry about this turning in to a cloud on the title.  PA law should guide you on this.

@Dave Bopp   

Get the paperwork done before you leave.  I rarely, if ever, have signed the paperwork on the day we close.  I've always done it up to a week in advance.  You can sign it before you leave and tell them not to release it until you call on the day it closes.  Then get someone you trust to inspect the property on closing day and get the keys.

@Account Closed Is correct... the agent (who has an interest the the transaction) cannot serve as attorney-in-fact for the client. But that may not be what the agent is suggesting.

Not sure which side of the transaction OP is on but, if the selling side, anything that needs to be executed and notarized can be pre-signed and held in escrow by the title company. The final settlement statement does not need to be notarized so that can be signed remotely on the closing date and scanned or faxed to the title company. 

The sales proceeds are directed to the owner of record so absent any fraud there is little risk of losing them.

@Michael Noto - it is a cash sale. Would you say that makes a difference in the decision?

@Tom Gimer - this does seem like a conflict of interest to me as well so I’m leaning in the direction of rearranging the travel to be there for the closing.

Thank you all for you advice!

I agree with the comments already made. Your agent should never sign for you. If you are the seller you should be able to sign everything ahead of time. If you are the buyer and it is a cash sale then you should be able to dotloop or docusign. If financed then the bank may want a wet signature, then you can do a mobile close wherever you are if still inside the US.

I agree with the comments above. First, if you are going to have anyone sign for you, you will need a POA executed in advance and approved by the Title Company (many times they have their own forms they prefer to use, which cuts down on time for them to approve/disapprove of it). You always run the risk of them simply signing without actually reviewing everything, especially if they are not disinterested, i.e. they get a commission if it goes through. As many investors can assuredly agree, often times there are last minute changes to the HUD or on a title bring-down which could impact your transaction.

@Dave Bopp You don’t have to sign at the title company. Have them send you the documents to sign, and then sign them in front of a notary. Your bank should provide a notary for you.

@Dave Bopp I saw you’re considering changing your travel plans. No need to do that. Last year, I purchased a property in NM. I live in Los Angeles and signed in Hawaii while on vacation. Real estate offices usually have an in-house title or escrow company (depending on what kind of closing state you’re traveling in).

With that being said, it's not illegal for an agent to sign as a POA on your behalf in the states I've worked (4 different states). It's just not a good idea. As an agent myself, I'd never assume that liability in the event that something gets signed that you aren't aware of. If you are traveling somewhere where you can't find a notary, it's best to just have a trusted friend sign for you.

Originally posted by @Dave Bopp :

Hi everyone, I've had closing for a rental property get pushed back due to a series of inspection issues that now overlaps with me being out of town. My real estate agent is saying I can sign my HUD1 and a few other disclosures ahead of time and then he can sign for the rest of the documents at closing. What are my risks when it comes to having someone else complete the documents for me? Although I would like to think this is moving somewhat in the direction of automating my business I would like to get a sense for any risk associated with this or things I should be considering.

Any input would be much appreciated!

I would never have my Realtor sign for me. Other than when they are managing a property and signing a rental contract.

You can have your lawyer sign for you. You can have the documents sent to you and sign remotely if that is allowed. I am told that in DE you need to sign in front of an attorney and it was not clear if DE requires the lawyer to be in DE. Otherwise, with property in OR, CA and HI, I have signed remotely. Some of the time I was signing outside of the USA (USA Embassy in London for example).

Speak with your title company or lawyer. It will not be the first time this has come up.