Virtual Real Estate Closings: Verification, E-Signature, Remote Notarization, Best Practices and Procedures

Description

Shelter in place and social distancing caused states to ease restrictions on requirements for in-person real estate closings. Although some practitioners regularly use remote closings, the COVID-19 world requires this to be the rule rather than the exception. Counsel must meet the needs of all parties to the transaction: the buyer, seller, lender, and insurance company.

Closing attorneys must always be vigilant in their review of due diligence, but virtual transactions create the potential for increased fraud. Examination of both the documentation from organizational documents to title commitments is essential. Attorneys should prepare to question and screen the reasoning behind omissions and exceptions not previously considered to meet the requirements of lenders and title insurers.

Counsel should discuss with parties the use of technology, the limitations of privilege, and the pros and cons of conducting a closing utilizing one of the video conference platforms.

Although closing with original signatures may prove impractical and/or result in delays to the closing process, attorneys must determine if their clients will accept "electronic signatures." Additionally, many states have provided a new option of remote notarization in limited circumstances. Given the rapidly shifting environment, counsel must comply with new state law and meet the requirements from the title company insuring the transaction regarding the recordability of such documents based on the local governments' potentially changed policies.

Listen as our expert panel provides best practices and procedures for conducting a virtual real estate closing that mitigates the risk of claims by buyers, sellers, lenders, or insurance companies.