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The real estate industry has been on the trajectory of digital transformation for many years, but current circumstances (county closures, social distancing measures, and a boom in the refinance market) have sped up the process of bringing eClosings into the mainstream. We break down exactly what an eClosing is and how it works below.
An eClosing is the act of closing a mortgage or real estate transaction electronically. All or some of the closing documents are viewed and/or signed online through a secure digital environment. Depending on the state you live in, you can take advantage of three main types of eClosing options.
Remote Online Notarization (RON)
A RON closing is a digital online closing that occurs where the signers and the notary meet via an audio and video application. The documents will contain an electronic signature and electronic notarization.
Hybrid eClosing
A hybrid closing is a combination of the digital and traditional closing, in which some documents can be viewed and signed online but others will need to be “wet signed” with a notary in-person.
In-Person eClosing
For in-person eClosings, all documents are eSigned in person with a notary.
Until recently, home closings via remote online notarization were only available in states where a RON bill had been passed. But, in light of current public health concerns, county recorder’s offices are closed, homeowners are less comfortable inviting an in-person notary into their homes, and we’re also in the middle of a significant refinance boom.
All of this together has prompted title insurance underwriters to broaden the use of RON nationwide, and state governors to issue executive orders authorizing RON in states that have not passed bills. This is provided you use a remote online notary who is in a state with an already effective RON bill. Meaning, if you are closing on a property in Illinois (which does not have an active RON law on the books), but your notary is in Florida (which does have an active RON law on the books), you may currently use remote online notary services.
You can check with your specific title provider on their eClosing with RON process, but the basic steps include:
Here at Spruce, the eClosing process is built right into our product. From our homeowner dashboard, customers can view and sign documents prior to the closing appointment, schedule an appointment with their remote online notary, and pay or receive funds via online banking. We make the process fast, frictionless, and transparent.
Equipment: RON closings are fully dependent upon a real time audio/video process, so it is important that the signers have high-speed internet access and a computer, tablet or smartphone with audio and video capabilities.
Valid photo identification: Depending on your lender’s requirements, you’ll need to present 1 to 2 forms of the following photo identification.
Witnesses: Some states, such as CT, FL, GA, LA and SC, require witnesses to sign certain documents. They are to be in the same room as you at the eClosing and will need to present valid identification.
In these unprecedented times, eClosing via RON also empowers lenders, real estate investors, PropTech companies, and homeowners to close transactions conveniently and securely without direct physical contact. Here at Spruce, we're committed to prioritizing the health and wellness of our team, partners, and homeowners––while also providing the essential services needed to keep real estate transactions flowing.
For more title industry insights, continue exploring the Spruce Blog or check out our FAQs.
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