A Guide to Closing on a House Remotely
The guide explains that remote house closings, accelerated by the pandemic, allow buyers, sellers, and professionals to complete the entire transaction digitally—including identity verification, electronic signing, online notarization, and fund transfers—offering convenience and safety but also presenting challenges like reliance on agents and the inability to conduct final in-person walkthroughs.
Traditionally, closing on a house required all parties to be physically present to review and sign documents. However, the pandemic accelerated digital transformation in real estate, leading to a significant increase in digital closings and remote online notarizations. As remote closings become more common, understanding their process and implications is essential for buyers, sellers, and real estate professionals.
What is a remote house closing?
A remote closing mirrors the traditional process but is completed digitally. In a remote closing, parties can:
- Verify identities virtually
- Sign documents electronically
- Notarize signatures online
- Transfer funds via wire transfer
This allows participants to complete the transaction from any location, reducing travel and logistical challenges, especially for those relocating.
How does a remote house closing work?
Not all digital closing methods are fully remote. Some use electronic documentation and signatures but still require in-person steps. The main models are:
- In-person e-notarization (IPEN): All parties are physically present but sign documents electronically.
- Hybrid eClosing: Some documents are signed digitally before an in-person meeting with a notary to complete the process.
- Remote Online Notarization (RON): The entire process is completed remotely using video conferencing, digital documentation, and remote notary services.
Pros and Cons of a Remote House Closing
Pros
- Physically safe: Reduces exposure to illnesses by eliminating in-person meetings.
- Convenient and efficient: No need to coordinate travel or meeting times, making scheduling easier.
- More time to review documents: Parties often receive documents in advance, allowing for thorough review and questions before signing.
Cons
- Reliance on real estate professionals: Buyers may depend more on agents for inspections and walkthroughs.
- No final walkthrough: Buyers might not be able to check the property's condition immediately before closing.
- Legal considerations: State laws vary, so it's important to confirm the legality of remote closings in your state.
How to Remotely Close on a House
Choosing the Right Real Estate Agent
- Experience: Ensure the agent is familiar with remote closings and can handle negotiations, property searches, and local lender sourcing.
- Availability: The agent should be available during business hours to perform in-person tasks on behalf of the buyer.
Document Preparation and Review
- Due diligence: Carefully review all documents, including contract clauses, inspection reports, financing materials, and appraisals.
- Form and delivery: Clarify which documents will be signed digitally, such as transaction, entity, financial, and real property documents. Consider including an "electronic signature rider" in the contract.
- Notarization: Identify which documents require notarization, typically the deed, mortgage or security instrument, promissory note, and notice of right to cancel or rescind.
Legal and State Requirements
- State laws: Confirm that your state allows remote online notarization and that your lender and title insurer accept remotely notarized documents. Work with your real estate attorney or title company to ensure compliance.
Completing the Closing Process
- Find a notary: Engage a state-commissioned notary to verify identities via audio-visual recording.
- Pay closing costs: Initiate a wire transfer for closing costs, keeping in mind bank processing times and holidays.
- Transfer of keys: Arrange in advance how and when the keys will be delivered, as this step is not handled in person.
How Notarize Can Help
Notarize’s remote online notarization platform streamlines the notarization process, enhancing security and efficiency for remote closings. The platform allows signers to notarize documents from any device and location, making the closing process easier for all parties involved.