Under Florida Statute 709.2105, a Power of Attorney must be "signed by the principal and by two subscribing witnesses and be acknowledged by the principal before a notary public." Therefore, based upon the facts you stated, it does not appear that the document signed only by your sister was property executed. Therefore, it cannot be used by you to convey her interest in the property.
Nonetheless, what do you mean when you say that the "buyer now wants witness signatures at closing?" In order to convey property in Florida, witnesses are required to sign the deed. However, if the Buyer wants the individuals who signed the POA to now sign the POA as witnesses that is an issue since your sister is not present. So, more information is required.
I would recommend speaking to a real estate attorney on this matter.
If the power of attorney was made in Florida after October 1, 2011 then two witnesses and acknowledgment before a notary are required in order for the power of attorney to be valid. If the power of attorney was made before that date, or made outside Florida, then it is still valid if it was valid at the time and place made.
Having said that, it will be necessary for you to satisfy the title agent handling the real property transfer (or perhaps in your case the buyer) that the power of attorney is fully effective before they will accept it with regard to the transfer of real property. Unfortunately, it is unlikely that the power of attorney will be accepted for a real estate closing if it is not signed by two witnesses and a notary.
I agree with Attorney Bertrand. Powers of attorney have been used frequently to perpetrate frauds. The buyer is right to insist that the power of attorney comply with the law. Your sister should have had a proper power of attorney prepared by a Florida attorney before she left the country. To fix the situation, your sister should consult an experienced Florida real estate lawyer.
Disclaimer: This answer is provided for informational purposes only, does not constitute legal advice, and does not create an attorney-client relationship. Actual legal advice can only be provided after completing a comprehensive consultation in which all of the relevant facts are discussed and reviewed.
The problem as I see it is that title insurance should not be issued on a warranty deed that the actual owner has not signed. This is often cleared up with overnighting the necessary documents to and from the absent owner.
R. Jason de Groot, Esq.,