What is an eClosing and How Does It Work?

Closing on a home or any real estate deal can be exciting. However, many find the real estate closing process tedious and inconvenient. You have to schedule a day where multiple parties can meet at the same time and location. While these traditional closings are still more common, eClosings offer a convenient alternative. What is an eClosing? Read on to learn more.

What is an eClosing?

An eClosing, also known as digital closing, is a digital alternative to the traditional in-person real estate closing. It allows buyers, sellers, and other parties to complete the closing online using various digital platforms and tools. The parties can sign and transmit key documents online. The closing may also involve the participation of online notary services. The idea is to streamline the closing process by making it more flexible. However, there are many components to eClosings, and they may occur in different ways.

The Benefits of digital closing

Predictably, eClosings can improve the process in many ways. The following are some benefits of digital closings:

• Convenience: Convenience is the primary benefit of eClosings. Handling the process online eliminates or reduces the need to coordinate in-person meetings.
• Speed: Digital processing can accelerate the closing process. With online documents, you reduce the need for mailing or hand-delivering documents.
• Cost Savings: eClosings reduce costs associated with paper, printing, and travel, making the process more affordable for buyers, sellers, and lenders.
• Error Reduction: Automated systems flag missing signatures or incomplete forms to minimize errors and reduce delays.

Types of eClosings

There are currently two types of eClosings: fully remote online closings and hybrid eClosings. With a fully remote closing, the entire process occurs online, and the parties may never need to meet in person. With a hybrid eClosing, some signings are online, but other documents are in person. For example, the lender may require ink for the loan documents.

Facilitating eClosings

The eClosing process relies on various digital tools and resources. The following are some of the online tools you may use:

• Digital Documents: All documents involved in the eClosing will be digital. Although the documents might have different formats, the parties can access and use them online.
• eSignatures: Parties can add eSignatures to documents using various methods. Some common options include typing your name on the document, adding an image of your signature, or using a stylus.
• Remote Notaries: Most eClosings rely on online notarization. Remote online notarization (RON) allows notaries to verify identities and notarize documents via secure video conferencing.
• Cloud Storage: The remote closing will use cloud storage to store the documents and, possibly, video of the signings. Cloud storage provides the parties with easy access to all relevant documents.

While eClosing is more convenient, it is important to note that it can’t be done everywhere. Not all jurisdictions allow for remote closings, and some lenders might not, either. There may also be issues with the technical literacy of other parties involved in the transaction.

Are you interested in eClosing for your next real estate transaction? Click here to contact First National Title & Escrow. We have the tools, resources, and experience to walk you through the process. Reach out now to learn more.

Thanks for visiting!