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How to Perform eClosing for Sell Side Real Estate and Cash Transactions

Stavvy Team

Are you considering eClosing? You’re not alone. 

Many title and settlement companies are embracing eClosing for seller-side transactions and cash buyer deals because of the business advantages, including time and money savings, business growth, competitive edge, and greater security. Although, operational efficiency is not the only driver for eClosing. In our tech-driven world, title agents are also investing in eClosing to meet customers where they are. 

Throughout this blog, we’ll explain what eClosing is, the benefits of digital real estate closing, why title companies are embracing eClosing for sell-side transactions and cash buyer deals, and how to prepare for and perform your first eClosing.

What is eClosing?

eClosing is the digital approach to a traditional, pen-and-paper real estate closing where some or all closing documents are accessed, presented, and executed electronically. It’s similar to a paper closing, but instead of meeting in person, title agents and signers meet digitally to sign and notarize closing documents via an eClosing platform

What are the benefits of eClosing?

eClosing offers many advantages, including time and cost savings, a better customer experience, enhanced security, a preferable chain of custody, and greater documentation accuracy. Perhaps best of all, it requires less manual work for title agents and can deliver operational efficiency at scale. 

The video below compares a traditional paper closing to a digital closing for sell-side and all-cash buyer transactions.

 

A pen-and-paper closing was the status quo for many years, but the rise of digital solutions and technology has drastically shifted consumer demands. Today, customers are challenging what has always been and seeking a remote closing option that complements their lifestyle and preferences. And title companies that are equipped to serve their needs are well positioned to win transactions left and right. 

If consumer demands and competitive advantage aren’t enough to motivate you to go digital, perhaps the operational efficiency of eClosing will. Let’s take a closer look.

eClosing can save title companies time and money

Before eClosing was made possible with remote online notarization (RON), a mail-away closing with a mobile notary was the only alternative to an in-person closing. However, preparing and shipping documents and hiring a mobile notary to conduct a mail-away can be as time-consuming, manual, and costly a process as an in-person closing, even for the most efficient title companies. Still, title agents often offer the option to serve the needs of their customers. In fact, that’s what Broker’s Title was doing until they implemented full eClosing with the Stavvy platform. 

A single mail-away closing can cost a title company hundreds of dollars per transaction in shipping, processing, and notary fees. Multiply that to reflect monthly transaction volume, and title agencies can easily spend tens of thousands of dollars each year to offer customers an in-office alternative.

If your title company actively avoids mail-away closings due to its known inefficiency and expense, sending title agents on the road to perform in-person closings is equally as costly. Let’s assume your agency handles 100 purchase transactions a month; that’s 50 sell-side closings and 50 buyer-side closings. Assuming that each signing takes, on average, 1 hour, not including travel, title agents can spend upwards of 100 hours per month just physically attending closing meetings. 

Regardless of market conditions, capital efficiencies are important to every business and business owner. Traditional, in-person closings require a lot of manual work, between scheduling, printing, and scanning documents, hosting closings in-office, shipping packages, and a whole lot more. Additionally, the business may incur costs to ensure the office is well stocked with paper, paper products, snacks, beverages, and parking validation for its clientele. Much, if not all, of this transaction-based spending can eat away at profit and be reduced with a digital closing strategy.

From a time perspective, the efficiencies are abundant too. Most title agents can perform a single eClosing on the Stavvy platform in 20 minutes. Using the same example as above—100 purchase transactions a month—title agents may spend 33 hours a month at the digital closing table instead of 100 hours in-office. This efficiency alone can yield a time savings of 77%, helping to improve your business's bottom line and employee morale. 

Digital closing can deliver a convenient closing experience 

Attending an eClosing allows buyers and sellers to sign closing documents wherever they may be, eliminating the need to travel, coordinate childcare, or take time off work. The convenience, freedom, and flexibility of a digital real estate closing delights customers and leaves a lasting impression. 

eClosing can enhance security and documentation accuracy

Chain of custody breaches and identity theft are common concerns for title companies, as there can be a lot of risks associated with conducting financial transactions. For sell-side transactions, an additional risk often presents itself—seller fraud. 

Many title companies have seen an increase in seller fraud over the years as fake IDs and criminals get more sophisticated. Trying to identify if a government-issued ID is authentic, even in-person with a highly trained eye, can be tough to do. Yet, it is standard practice for in-person real estate closing. However, a digital closing on a secure eClosing platform can help mitigate these risks. 

eClosing on the Stavvy platform involves knowledge-based authentication (KBA) to verify identity through credit report data and specialized software that analyzes the validity of a government-issued ID. This verification occurs before a digital closing begins, leading to greater confidence and less business risk for your company. Additionally, during the closing, a proper eClosing platform should ensure that every document is signed, complete, and ready for post-closing, leading to greater documentation accuracy and turnaround time. 

Lastly, by taking a real estate closing online, title agents no longer have to rely on shipping packages back and forth between buyers, sellers, and notaries. Eliminating shipping from the process removes the risk of lost or stolen packages or a breach in the chain of custody. This also ensures you and your customers a safer and more secure transaction.

Why title companies are performing eClosing for sell side real estate and all-cash buyer transactions 

Many title companies are embracing eClosing today for a variety of reasons; some of the most common are: 

  • Buyers, sellers, and realtors are asking for digital closing options. As a title agent, you’ve likely lost count of the times a signer has asked whether the closing process will ever occur remotely. Perhaps, at the time, it felt far-fetched or that going digital was just a temporary fix for the COVID-19 lockdown. However, growing state-level RON legislation, forward momentum on the SECURE Notarization Act, and consumer demands are driving measurable eClosing technology adoption and changing the title industry’s landscape. 
  • Title agents and settlement attorneys want more control over real estate transactions. Due to the nature of an in-person closing, there are unknowns and obstacles out of a title company’s control. For instance, a signer running late due to traffic, the inability to find parking, or having to reschedule or file a last-minute Power of Attorney (POA) request. The convenience and flexibility of a digital closing ensures that scenarios like these don’t derail a closing or a title agent’s schedule. Additionally, closing documentation and data can flow freely and securely through an eClosing platform with a digital audit trail. eClosing technology gives title agents real-time access to the documents they need, when they need them, and provides tools to collaborate seamlessly with customers and clients. 
  • Title companies want to remain competitive in the marketplace. Embracing eClosing early on will set your business up for success. Many of our customers, like The Title Team, Broker’s Title, Celebration Title,  and Federal Title and Escrow Company, have committed to digital closing and now experience operational efficiency and competitive advantages as early adopters.
  • Title agents are preparing for mortgage lender adoption. Mortgage lenders are working behind the scenes on their digital closing strategies, providing title companies with the runway to get RON-ready, invest in an eClosing platform, and get comfortable with digital transactions. Many title companies are beginning the process by implementing eClosing for seller-side and cash transactions.

How to perform an eClosing for cash and sell side real estate transactions

A digital seller-side transaction requires title agents to use RON and eSignature products. However, an all-in-one eClosing platform makes eClosing extremely simple and streamlined. In the Stavvy platform, a title agent can perform an eClosing with RON in six simple steps.

Performing an eClosing for a sell side real estate transaction

  1. Use the Eligibility Engine to determine if documents can be processed with digital notarization or eRecording.
  2. Establish a meeting and invite signers. 
  3. Prepare documents for electronic signature. Use annotation templates to quickly prepare frequently used documents, such as a Warranty Deed. 
  4. Once the meeting begins, verify the identity of the signers.
  5. Monitor and execute the signing process.
  6. Record the document(s) with your registrar. 

Performing an eClosing for a cash real estate transaction

Digitally closing an all-cash buyer transaction requires an eSignature tool. However, title companies can create operational efficiency and data consolidation by performing signing meetings in an all-in-one eClosing platform instead of using disparate tools. In the Stavvy platform, a title agent can complete a signing in five steps.

  1. Upload documents that require eSignature.
  2. Enter information about the signer(s).
  3. Apply a template of existing annotations or manually add annotations to your documents.
  4. Mark “Ready to review” and send to the signer(s) for eSignature.
  5. When signed, view the certified document package.

Check out this blog post on how to close a cash real estate transaction quickly to learn more.

How to get ready for eClosing

You’ll need to take a few steps to get ready for eClosing, ensure adoption, and achieve success at your title agency. Below are the top tips from Stavvy’s eClosing experts.

  • Make eClosing a company-wide initiative. Title companies should identify an internal eClosing champion, such as a title agent, a settlement attorney, an in-house notary, or an escrow officer who is excited about digital closing and can motivate the rest of the organization to ensure company-wide adoption. 
  • Prioritize RON authorization for in-house notaries and title agents. All notaries conducting eClosing must obtain RON authorization through the Secretary of State’s office. For title companies that choose to partner with Stavvy, this is a process that our team can help you navigate, making for one less step in your eClosing journey.
  • Find an eClosing platform with the right set of tools. Selecting an all-in-one eClosing platform with must-have features like eSign, RON, and in-person electronic notarization (IPEN) provides workflow efficiency to your team and a seamless experience for your customers. But features alone won’t ensure you’re set up for digital success. Partnering with an eClosing platform offering onboarding, product implementation, training, and accessible support is instrumental as you embark on your digital closing journey.
  • Promote your eClosing service. Let your existing customers and partners know you're ready to offer improved customer experiences with eClosings. You can do this in various ways, including email, sales meetings, and social media. Searching for ideas? We created a marketing guide for title companies to help you successfully market eClosing, RON, and IPEN at your title company.

Embrace eClosing for sell side real estate and all-cash transactions to help your business grow

Investing in title closing software is not a small decision. Undoubtedly, there is a lot to consider, understand, and research. However, it’s not as complicated a process as you may think, especially when you align yourself with an eClosing partner and platform that can make the transition as seamless as possible. Striking while the iron is hot and capitalizing on operational efficiencies as an early adopter can set you and your title company up for success now and in the future.

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