The different ways to close real estate purchase or refinance
The ability to digitally purchase a home or refinance a mortgage is contingent on the laws in each state. While a digital closing is an option is many states, there are many ways consumers can complete their transactions.
Traditional Wet Signing: These closings are handled in-person and all of the documents are in paper format. The closing is handled with an in-office or mobile notary public signing with the buyers and sellers. They can also be conducted by what is called a mail-away, where the documents are mailed to the buyers and sellers, who must locate a public notary in their area and sign in their presence.
Hybrid E-closing: These closings are similar to the traditional closing in that they are handled in-person. Some of the documents are wet signed, while some are signed digitally with an e-signature. These are typically handed in-office or the mobile notary drives to meet the buyers and sellers.
In-person Digital E-closing: Terms for this type of closing have not been standardized yet in the industry. In this closing, the notary public is sitting face-to-face with the buyers and sellers, but 100 percent of the documents are signed with e-signatures. This can happen in the title agent’s office or the notary public can meet the buyers and sellers at a different location.
Remote Online Notarization (Remote Notary): This type of closing is the newest version. You might also hear the terms webcam or remote used to describe this type of closing. What’s new here is that the notary public is not face-to-face with the signers. Instead the notary public appears before the buyers and sellers via some webcam or audio visual-technology. Because of that, all of the documents are digital and e-signed.
Jeremy Yohe is vice president of communications for the American Land Title Association and Tyler Newlon is an escrow officer at Pioneer Title Agency, Arizona’s largest locally owned and operated title company. For more information, visit www.alta.org/digitalclosing.