EClosings Are Coming To Real Estate Settlements Sooner Than You Might Think
Real estate settlements in Pennsylvania have always been an emotional event for buyers and sellers. Its a time for beginning a new chapter in a buyer's life or the closing of a book for the seller. In most cases it is a relatively joyous event when a property transfers to a new owner.
But one of the pain points of a real estate settlement is the actual event itself. Between trying to coordinate everyone's schedules (i.e. buyer, seller, buyer's agent, seller's agent, title company, attorney, mortgage lender, babysitter for the kids, travel to the location, navigating traffic, etc.) to signing a pile of paperwork, it's not as fun-filled as you might have imagined.
But all of this is about to change . . . and in a big way! eClosings are coming to a real estate settlement near you.
Why hasn't this happened until now? After all, real estate contracts and disclosures have been electronically signed for years. Seems like a no-brainer that you would be able to close a real estate transaction electronically. The stumbling block has been the notarization of documents. Well, we've just jumped over that hurdle.
On July 28, 2017 a mortgage closing took place without setting one foot in a conference room full of people. All documents were signed on a MacBook and an online notary was utilized.
In many states, eNotarization has been around for a while but the notary and the person signing the documents had to be in the same room using the same electronic device. Online notarization takes e-notarization a step further by using technology to expand the definition of “in the presence of” a notary to allow notaries to remotely notarize documents by real-time, two way video and audio communications.
The lack of uniformity in eNotarization laws from state to state in addition to the burden on the state notary to comply with additional rules, may be why we have not seen widespread adoption of eNotarization in the real estate transaction, despite the benefits of reduced errors and reduction in post-closing and funding times.
In Pennsylvania, Senate Bill 595 was introduced on April 17, 2017, that would allow "audio-visual communication" to allow a notary "to see, hear and communicate with another individual in real time using electronic means." This bill is still being discussed and is not yet the law, but it's just a matter of time (in my opinion).
When it does become law, I see a flood of mortgage lenders, title companies, and attorneys in PA that will embrace this new way of doing business so that they can differentiate themselves from their competition and offer superior service.
The reality of buyers and sellers using a laptop, tablet, or mobile device as an option to close their real estate transaction in our state is getting closer every day.
All the best!
Tom Blefko is the Vice President of Operations for RE/MAX Pinnacle. He is originally from Lancaster, PA and is a graduate of Franklin & Marshall College with a B.S. in Business Administration. He en....
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