Nate Baker is the Co-Founder and CEO of Qualia, a digital real estate closing platform.
In today’s world, you can buy almost anything on your phone and have it delivered to you. And with the Covid-19 pandemic forcing the world toward contactless interactions, online shopping has become a fundamental part of daily life. But even before the pandemic, buying expensive, big-ticket items online was as easy as buying household essentials. Take buying a Tesla, for example, which can cost upward of six figures. Buyers can shop online and configure the car they want. They can sign and pay electronically and have it shipped directly to their driveway. The process is seamless and transparent, and it requires minimal effort on the part of the buyer.
Most of us will not be buying Teslas any time soon, but many will, in their lifetimes, purchase a home. And while it’s possible to shop for a home through virtual tours and even customize finishes online, you can’t complete the entire process electronically.
But before homebuying can become a fully online experience from start to finish, I believe one important thing has to happen: We need to move away from the in-person notary model. Unlike just a few years ago, this is now completely possible from a technical standpoint and is already permissible in dozens of states across the country. Yet moving the notarization process online — otherwise known as remote online notarization (RON) — remains the largest roadblock to digital home buying.
We have the capability today to make closing on a home a secure, cost-efficient and virtual process — I say this with certainty as the CEO of a firm that enables exactly this. And with all of the pieces in place to allow people to buy a home completely online, business practices across the real estate industry must catch up with the technology.
Moving Toward Digital Homebuying
The lack of regulatory guidelines, broad-based acceptance and technological infrastructure are generally considered the reasons for the limited movement toward RON and digital closings more generally. Up until the last few months, these roadblocks did present legitimate coordination challenges that caused settlement companies and mortgage lenders to kick the can down the road and maintain the status quo in real estate closings.
Today, however, the pandemic and era of mandated social distancing have changed how we think about homebuying. It has forced a modernization of the real estate buying process as zero-touch closings become essential to doing business. Moreover, the pandemic has demonstrated that those perceived barriers don’t actually exist anymore.
On the technology side, we’re without a doubt in a much different place than we were five years ago. Innovations in closing software have provided the secure infrastructure to close on a home remotely. Add to that developments in videoconferencing, e-signing, knowledge-based authentication and ID verification technology, and all of the pieces are in place to move toward facilitating buying a home completely online.
Meanwhile, on the regulatory side, the pandemic has accelerated our path to contactless home closings. Nearly every state has passed laws or instituted permanent or emergency executive orders allowing some form of remote notarization that enables a truly digital home closing. At the federal level, the SECURE Notarization Act for remote online notarizations is making its way through Congress.
What Needs To Happen Now
Collectively, we have to admit that the real estate industry has moved too slowly toward electronic closings. So what can we do to remove this obstacle? What remains is for consumers to demand more from their real estate partners. This includes solutions like remote notarization.
Before the pandemic, the industry viewed a fully digital closing as a luxury, not a necessity, and consumers expected little beyond the traditional experience. There was no way of knowing how important and essential it would become to offer buyers and sellers the ability to coordinate their closings and review and sign closing documents in the safety of their homes. Now, it is painfully apparent.
With all of the workarounds and expedited innovations afforded during the pandemic, consumers were able to get a glimpse of what a completely online closing could be. And they should expect the real estate professionals they work with to offer the same virtual, contactless options made possible during social distancing by these temporary measures after the pandemic ends.
This year will go down in history as one of unprecedented change and adaptability as we add digital alternatives across everything we do. Let’s not let real estate fall behind.
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