Closing during a pandemic? New options while social distancing
by Sara Ifert
on Tuesday, April 21st, 2020 at 3:59pm.
When you think of closing on your home, you might envision yourself signing paperwork around a big conference table, followed by getting the keys to your new home. Just like most parts of the real estate buying and selling process, the closing process has been adjusted to keep you safe. Read below for the many options Homestead Title is giving our clients for closings. They also have shared tips for buyers and sellers who will be closing soon.
A new venue for closing - your car!
Some title companies have made minor adjustments to the closing process by offering clean pens, scrubbed tables, more distance between parties, and limiting the number of people attending closings. Homestead Title has gone a step further to protect clients, offering “drive-up closings.” Instead of gathering in a room around a conference table, everyone stays in their cars and signs documents in the parking lot.
“We have found that customers are cautious and concerned. They are usually wearing masks, and often don’t roll their windows down enough for us to fit the documents through the window,” said Peter Zarov, President of Homestead Title. “With this level of concern, we can’t imagine how they would feel comfortable sitting all together in a conference room. The drive-up option is good way to keep everyone safe while we complete the closing process."
A note about virtual closings: You may be wondering, why can’t you just sign paperwork online? A completely virtual closing is not an option for buyers who are working with a lender. Most lenders require the note, mortgage and CD to be signed in ink. This rule may change in the future - some lenders are beginning to allow e-signatures. But for now, financed buyers will likely need to choose the drive-up option for closing.
Even if you aren't financing, there are other challenges with 100% virtual closings. If you are not tech savvy, the approved digital platform may be difficult to use. It also takes longer to complete the closing process. A typical seller signing might take 15 minutes for their part of the closing process in the office, but takes 35 minutes online. Of course, the seller saves time not having to travel to closing.
According to Peter, the industry has more to do to allow for fully remote closings. There are still technological hurdles, and many documents still require an ink-signature - meaning most buyers still need to attend closing. Still, Homestead Title is proud to offer multiple options to buyers and sellers for closing.
Another option for some sellers and a few buyers are video conference closings. "This is not a truly digital closing because the parties still sign with pen and paper - but do so in the presence of our attorney on video conference," said Peter. The attorney can then authenticate their signatures. While it is not a notary and there is no notary stamp this process has the exact same legal effect. You can read more about this on Homestead Title’s blog.
How to Prepare for Closing During Social Distancing
If you are a buyer or seller attending a closing soon, Peter suggests taking steps in advance to prepare for potential hiccups on closing day.
Say you get sick and cannot attend a drive-up closing. Having a backup plan in place well ahead of closing is a good idea. Buyers may consider appointing a trusted person - ideally someone who is not living in your household, as a Power of Attorney (POA). Recently, a buyer fell ill the night before closing. Homestead Title worked with her lender to allow her father to be appointed as her POA. “I had a video conference with the buyer and her Realtor where she authenticated her identity. We viewed her ID and her Realtor confirmed it was her, and she signed the POA in front of me. I authenticated her signature as an attorney, e-recorded it, and obtained the lender’s approval to close with her POA. We closed on time,” said Peter.
Another preparation to consider would be to draft contingencies into your offer in case of delay caused by COVID-19. Our team can help you draft this.
Finally, be sure to understand your options for closing ahead of time. Sellers might have the option to pre-sign, and buyers should ask their lenders about digital closing options. Buyers and sellers alike should have a backup plan if someone is unable to come to closing. Digital closings should be scheduled early, as they can be a challenge on the day of closing.
“We know that buying and selling are big life events that, while exciting, are also stressful, confusing, and sometimes difficult. This pandemic only heightens these emotions and challenges. Our mission is to lower that stress, ease difficulties, and make things understandable and simple. We are doing all we can to help,” said Peter.
Despite social distancing, closings haven't lost their celebratory feel. “We have had some very fun, upbeat drive-up closings where the buyers, sellers and realtors all parked with empty parking spaces between them, windows down - celebrating with much laughter and joy!”
After all, you just bought (or sold) a home - a celebration is in order!
Are you looking to buy or sell in the next few months? Contact us for a virtual consultation to help you get a strategy in place. Most of the real estate process has been adjusted to maintain social distancing and protect the health of everyone involved. Despite the challenges of this pandemic, we are here to help.