What is a Digital Closing and What Does Remote Online Notarization Mean?

Closing on a home is a lengthy, intensive process for everyone involved. As technology advances and continues to become part of every aspect of our lives, it seems archaic that the home closing process is still primarily paper-based. Now, new processes are being developed to help bring the closing process into the 21st century, starting with remote online notarization, and even digital closings.  

1. What does a Digital Closing Involve? 

A digital closing, or eclosing, expedites the closing process on a home by processing some closing documents electronically. These documents can be signed remotely by the homebuyers or sellers using a digital signature. Not all documents qualify, however. At some stages of the closing, buyers and sellers still need to physically sign actual printed documents. Eventually, it is likely that the entire process will be digital, but not all lenders have the digital capabilities to do so just yet. The benefits of completing a digital closing are the time saved in processing, filing, and funding, as well as the reduction of potential human error which comes with manually processed documents.  

2. What is Remote Online Notarization? 

Finding a notary to sign and make your closing documents official can be one of the most time consuming and inconvenient parts of the house closing process. However, as of January 1, 2020, remote online notarization will be legal for Florida Realtors, based on a bill signed by the governor this past July. This means homebuyers can have a document notarized online, through video chat, or digitally sign an e-document. Programs are still being developed to ensure that the process of online notarization is secure and to make it more widely available to buyers and sellers everywhere.  

3. Why Won’t Online Closings be Big in Florida Immediately? 

The process of switching to a primarily digital platform for home closings is inevitably going to be a long one, especially in Florida. This is because there are so many lenders for mortgages, and not all of them are ready, willing, or able to make the switch over to a digital format. Furthermore, lenders have not yet figured out how to legally foreclose on homes in a digital format as of right now.