Discover a more efficient and seamless closing process through the use of digital closings, commonly referred to as eClosings.
What is an eClosing?
An eClosing is a real estate closing that leverages digital tools to handle the execution of closing documents. Instead of physically signing stacks of paper, parties can review, sign, and notarize documents electronically, with certain types of eClosings even allowing for remote participation. This process integrates electronic forms, signatures, and in some cases, remote online notarization (RON).
Types of eClosings
There are three main types of eClosings, each designed to meet different needs:
Hybrid Closings
A Hybrid Closing is a combination of both electronic and traditional paper-based document signing. In this scenario, some documents are signed electronically, while others require a wet ink signature. This approach allows for flexibility and helps parties transition into the fully digital closing process.
Electronic Closings
In an Electronic Closing, all documents are signed digitally in person. The notary verifies the signer’s identity and applies an electronic seal and signature to the digital documents. This method offers the convenience of completing the entire process electronically while still meeting in person.
Remote Online Closings (RON)
Remote Online Closings (RON) allow all documents to be signed and notarized electronically, with parties participating through an online video conference. This method eliminates the need for in-person meetings, making it ideal for individuals in different locations. RON has grown in popularity due to its ease of use and accessibility, particularly during the pandemic when physical meetings were challenging.
Types of Notarizations in Digital Closings
When it comes to digital closings, notarization options vary depending on state laws and preferences. Here are the main types of notarizations used in eClosings:
1. Traditional Wet Ink Notarization (TWIN)
TWIN is the standard form of notarization where all signers must be physically present before a notary to sign paper documents with wet ink. The notary verifies their identity, then applies a traditional ink stamp or seal to the documents.
2. In Person Electronic Notarization (IPEN)
In IPEN, the notarization takes place in person, but all documents are signed electronically. This method still requires physical presence but eliminates the need for paper documents.
3. Remote Online Notarization (RON)
RON allows signers to appear before a notary via a two-way audio-video connection over the internet. Signers can eSign digital documents, and the notary verifies their identity remotely. A recording of the entire transaction is made, providing extra security and proof of the notarization process.
4. Paper Remote Online Notarization (PRON)
In PRON, the transaction takes place online like RON, but some documents still require wet-ink signatures. These signed documents are then sent to the settlement agent for final notarization. This method is often used when specific documents, such as the mortgage note, require a physical signature.
5. Remote Ink Notarization (RIN)
RIN allows signers to appear before a notary using video conferencing technology, but all documents are signed in wet ink. Once completed, the documents are mailed to the notary for certification and affixing of the notary seal.
Benefits of eClosings
Why are more people opting for digital closings? Here are some of the key benefits:
Closing from Anywhere
With remote options like RON, signers can close a real estate deal from virtually anywhere—whether at home, on vacation, or even in a different country. This flexibility is ideal for parties who may have scheduling conflicts or live far from the closing location.
Faster Document Delivery and Shorter Signing Appointments
eClosings reduce the time it takes to deliver, review, and sign documents. What used to take hours of in-person signings can now be completed in a fraction of the time, leading to a more efficient closing experience.
Enhanced Security and Error Reduction
Digital systems automatically track each step of the signing process, ensuring that all signatures are captured and documents are properly notarized. These systems also prevent alterations and can flag any inconsistencies, reducing the risk of fraud or mistakes.
Environmental Benefits of Going Paperless
By eliminating the need for printed documents, eClosings significantly reduce the amount of paper waste. This shift supports environmentally conscious practices and reduces the need for physical document storage.
State Regulations and Availability
While eClosings offer many advantages, their availability depends largely on state regulations. Here's what you need to know:
Which States Currently Allow Remote Online Notarization (RON)?
As of now, many states allow RON, with some of the most notable being Texas, Virginia, and Florida. Other states are in the process of passing legislation that would permit RON.
Here's a visual representation of the states that currently allow or are working on RON legislation:
Image Source: Old Republic Title. Digital Closing Services. Retrieved from https://www.oldrepublictitle.com/other-services/digital-closing/
How State Laws Affect the Use of eClosings
State laws govern how and when electronic and remote notarizations can be used. In some states, only certain types of eClosings or notarizations are permitted. If you’re planning to close digitally, it’s important to consult with your title company or notary to ensure compliance with local laws.
FAQs on Digital Closings
Here are answers to some common questions people have about eClosings:
Are eClosings secure?
Yes, eClosings utilize advanced encryption and authentication measures to ensure that all documents are secure and tamper-proof. RON transactions are also recorded, providing an additional layer of protection.
Can I do an eClosing if my state doesn’t allow RON?
If your state doesn’t allow RON, you may still be able to participate in a hybrid or IPEN closing. Check with your title company to explore your options.
How long does an eClosing take?
The length of an eClosing can vary depending on the type, but in general, eClosings tend to be much faster than traditional closings. Many can be completed in under an hour.
Do I need any special technology to participate in an eClosing?
For remote eClosings, you’ll need a device with internet access, a webcam, and a microphone for video conferencing. You may also need to complete identity verification steps such as knowledge-based authentication or submitting a photo of your ID.
If you're interested in learning more or need personalized guidance, book a mentorship session with me today. Let’s make eClosings work for you!
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