Digital closing a.k.a. remote closing – New opportunity for your real estate business?
Digital closings, or remote online closings as they are known in the title industry, are a complete game changer for real estate agents and their clients.
What makes digital closings so special?
Using the latest identification verification technologies, your title agent at Federal Title can now facilitate the entire document signing and real estate closing experience digitally through an online portal. Not only does a digital closing save the time and cost of having to travel to a physical location, it also opens up new opportunities for real estate agents to rethink how they deliver the real estate closing experience to their homebuyers and sellers.
Once the digital closing method become customary, real estate agents will no longer be bound to a real estate closing experience centered around the closing table.
Real estate agents will be free to get creative around delivering a truly unique real estate closing experience for each homebuyer and seller, because a digital closing allows agents, buyers and sellers to complete the closing process from anywhere in the world.
We think of digital closing technology as a cross between Zoom and Docusign – with a few more security measures in place. By now, Federal Title is highly experienced how to conduct a digital closing, having conducted our very first digital closing back in 2019.
Back then, the industry was still unsure about digital closing technology and expressed concerns about security and potential for fraud. However, those fears of about the digital closing began to subside when the world was thrown into a global pandemic in 2020. Federal Title was ahead of the curve and ready to make the transition to the digital closing era.
Title agents had to get creative about their closing solutions, and while most title companies simply transitioned to “drive through” closings, Federal Title leaned into its digital closing capabilities, providing a truly contactless and socially distant closing solution for real estate agents and their clients.
Legislation at the state level regarding digital closings has steadily made progress. Virginia and Maryland both have legislation on their books regulating digital closings, and currently sellers and all-cash buyers around the country are allowed to use a digital closing platform to facilitate their home sale or purchase. (We’re still waiting on DC to pass a rule on par with digital closing legislation in Virginia and Maryland.)
But what’s really going to open the doors for the digital closings is the passage of federal legislation. Once that happens, we think more lenders will jump on board. Then, more homebuyers who are financing their home purchase will become eligible to choose a digital closing.
We’re keeping our eye on the passage of legislation that will provide better guidance and standardize the digital closing process across the nation. As soon as we get the green light from legislators and lenders, Federal Title will begin offering the option of a digital closing for every transaction.
The U.S. House of Representatives passed the SECURE Notarization Act at the end of July 2022, and now the bill is awaiting debate and a vote in the U.S. Senate. Stay tuned for updates on digital closings and how they will impact your real estate business.