See what mortgage you qualify for
Nowadays, you can buy almost anything online. With a few taps on a screen or clicks of a mouse, everything from cars, furniture, clothing, groceries and takeout can be yours. And while real estate might be the most complex transaction you ever tackle, you can buy your home online.
Yes, you read that right – a remote real estate closing is a real thing. And you can close on a house remotely in most of the U.S.
Keep reading to learn more about what you need to complete a remote real estate closing.
What Is a Remote Closing on a House?
A digital closing (aka remote closing, eClosing or virtual closing) is a home closing that allows you to sign documents electronically and verify your identity remotely.
Though a remote closing is often paired with an eMortgage, which finalizes the entire home buying process online, remote closings aren’t always completed entirely by computer. For those of us who prefer the sensation of putting ink to paper, remote closings can also include sending and receiving documents for signature by mail.
Let’s say you live in New York but plan to relocate to Texas. A remote closing will let you finalize purchasing your new home without you ever needing to book a flight to the Lone Star State.
Are you intrigued? We’ll get into the details and show you how it works.
How Does a Remote Closing Work?
To buy a house online, you’ll go through many of the same steps required for a traditional home purchase.
Buying a house is – first and foremost – a transaction. It is an exchange of something valuable (a house) for something else that is valuable (money). It involves an agreement (the mortgage agreement) and a lot of paperwork to document what’s happening and keep track of who owns what.
To close remotely, you must provide:
- A government-issued photo ID (like a passport or driver’s license)
- A wire transfer(s) for the closing costs and down payment
- Signed, notarized mortgage documents (if applicable)
- Notarized closing documents (like the deed)
- Signatures on all other paperwork
Today, most remote closings are hybrid closings and most transactions are completed virtually. Other remote closing options include remote online notarization (RON) and in-person e-notarization (IPEN).
In 2020, the real estate market largely transitioned to showing homes remotely and closing electronically in response to the COVID-19 pandemic. Many states made exceptions to their existing laws, allowing home buyers to close on a home without ever coming in direct contact with another person.
Fully remote closings aren’t available in some states, but you may be able to finalize your home purchase with a hybrid closing, which is currently one of the most popular ways to close on a home.
With a hybrid closing, you can send payments and sign documents that don’t require meeting with a notary in person electronically.
The good news is that a hybrid closing usually allows you to do your part at your convenience – and you probably won’t have to be physically present on the closing date.
Remote online notarization (RON)
Even if you opt for a remote closing, you must verify your identity and sign all appropriate closing documents. This is where RON comes in.
RON offers the ultimate remote closing experience. You never appear in person to make any payments, verify your identity, sign paperwork or get documents notarized.
Instead, you log in to a video call (via Skype, Zoom or other video conferencing software), present your government-issued ID to a representative from the title company and a notary and sign all your paperwork electronically.
Remote online notarization is not available in all states. And it may be a temporary offering in response to COVID-19 concerns in the few states that offer it.
Nearly every state in the U.S. has (or had) temporary or permanent remote or electronic notarization laws in place. Because the rules may change, you should check your state government’s website to confirm the rules on remote notarization.
In-person e-notarization (IPEN)
Whether you’re attending an in-person closing or closing remotely, there will be documents you’ll need to get notarized. With IPEN, those documents are notarized electronically during an in-person meeting with a notary.
The difference between traditional notarization and IPEN is that IPEN uses digital signatures and stamps to notarize electronic documents, replacing physical notary stamps, pens and paper.
Closing documents can be signed and stamped electronically using both RON and IPEN. And in addition to not wasting paper and saving trees, IPEN provides a clear audit trail and improved security compared to the filing and storage of physical documents.
Can you close using DocuSign?
Thanks to the E-SIGN Act, you can close on a house using DocuSign or other electronic signature software. But some states require a wet signature on certain documents.
What Is a Wet Signature?
A wet signature refers to a wet-ink signature. It’s what you get when you sign a physical document with a pen. A dry signature is an electronic signature, which, in most cases, is a legally acceptable way to sign documents.
Some states require wet signatures during remote closings for notarized or collateral documents, such as a promissory note, mortgage or deed of trust.
You Can Remote Start Your Car. Why Not Remote Close on a Home?
Today, there are so many things we can do remotely, like working from home or starting our cars. Depending on which state you call home, closing on a home remotely is an option you may be able to take advantage of.
Federal Deposit Insurance Corporation. “The Electronic Signatures in Global and National Commerce Act (E-Sign Act).” Retrieved July 2022 from https://www.fdic.gov/resources/supervision-and-examinations/consumer-compliance-examination-manual/documents/10/x-3-1.pdf