While much of the rest of the process has gone virtual, attorneys are still meeting home buyers in person for the final step in the real estate transaction: the closing. That’s because in Massachusetts, all-digital closings are not allowed.
“We’re the last state in New England that won’t allow remote online notarizations,” said Scott Kriss, president and CEO of Kriss Law/Atlantic Closing & Escrow in Needham. “You’d think Boston would lead the charge, but unfortunately the state Legislature didn’t pass a bill to even temporarily allow remote notarizations.”
More than half of states have passed either permanent or temporary legislation to allow remote online notarization that allows a recorded video conference to substitute for a physical meeting between buyers and an attorney, according to the National Notary Association.
“We’ve advocated digital closings for years, but now we’re in a need-versus-want situation to protect our attorneys and to protect buyers,” said Hugh Fitzpatrick, CEO of New England Title & Escrow Services in Tewksbury. “At the very least we should be able to ship documents to borrowers, get them on a video chat, and record the conversation while they show us their identification and sign papers.”
A creative approach
Until digital signatures become legal, the paramount goal both Fitzpatrick and Kriss share is to keep everyone safely at a distance.
“We can control things to a certain extent in our office, so we have everyone wear masks and gloves and sit at least 6 feet apart,” Kriss said. “We have the buyers wait in the car until the last minute, so no one is in the waiting room. We wipe down every surface with disinfectant, and then use new pens that get thrown away after they’ve been used.”
Fitzpatrick said his firm offers borrowers the option of coming to their house, a park, or a patio to gather signatures.
“Before we meet with anyone, we ask a series of vetting questions to find out if anyone was exposed to the virus or has a family member who is sick,” said Fitzpatrick. “If so, we will postpone the closing.”
Otherwise, Fitzpatrick said, their attorneys prepare the paperwork with tabs to make it easier to identify places that require a signature to speed up the process.
“We use masks and gloves, place the papers on a table, and then call the buyers into the office while we stay 6 feet away,” said Fitzpatrick. “They sign the papers and put them in a shipping envelope. We pick that up with disposable gloves and toss the gloves afterwards.”
Closings used to include multiple people, but now they are limited to only the essential people for signatures, said Dana Bull, a realtor with Sagan Harborside Sotheby’s International Realty in Marblehead.
“We used to have the buyers, the sellers, the buyer’s agent, the seller’s agent, attorneys for each side, and sometimes even the lender would stop by,” said Bull. “Now just the buyers and their attorney are present.”
Sellers usually provide power of attorney to the real estate lawyer, so they don’t have to sign papers in person, said Kriss.
“For refinances, we tend to drive to people’s homes, look at their identification, and then hand them the closing packet,” said Kriss. “The attorney can sit in the car and talk through the documents if there are questions, and then the borrowers can sign everything and leave the packet on their front step. The attorney can finish the notarization process in the car.”
For purchase transactions, said Kriss, the buyers usually need more guidance and don’t always have a property where the closing can be finalized.
Smoke certificate and real estate records
The requirement that sellers provide a certificate from the fire department that proves that the property has a working smoke detector and carbon monoxide detector before the closing has been adjusted during this emergency, said Bull. Now that responsibility is turned over to the buyers, who can defer the inspection for up to 90 days after the closing.
While some transactions have been delayed because of appraisal and home inspection requirements, Kriss said that funds can be disbursed from closings immediately because documents can be recorded electronically.
A fully digital closing may eventually be a possibility, but for now, safety protocols are keeping real estate transactions moving.