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.
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.
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.
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.
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.
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.
Many title companies are embracing eClosing today for a variety of reasons; some of the most common are:
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.
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.
Check out this blog post on how to close a cash real estate transaction quickly to learn more.
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.
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.
Learn more about how the