What to expect when closing on a house remotely

A few years back when the pandemic was raging, many homebuyers were unable to attend home closings in person. Remote closings enabled these buyers and refinancers to finalize their transactions safely and conveniently. The pandemic is long gone, but remote closing has continued, remaining a viable and popular option for many home purchasers and owners seeking to refinance, especially out-of-state buyers, traveling professionals, and investors. But you don’t have to fit these narrow descriptions to be a good candidate for a remote closing. Nearly any person comfortable with technology can benefit.

What is remote closing? How does the remote closing process work, and how do you prepare for a remote closing, you wonder? This article will answer all your questions and provide helpful information on key points, including hybrid closings, remote online notarizations, in-person e-notarizations, the role of a remote closer, and more. Let's take a deeper dive into the subject and clear up any misconceptions.

What is remote closing?

As the term implies, a remote closing simply means closing on your real estate transaction from afar, without meeting in person. This can apply to a home purchase or a mortgage refinance. Instead of showing up at a designated closing location like the lender’s or title company’s office, which occurs with a traditional closing, you complete the transaction virtually from the comforts of your home, office, or other remote location. Just as convenient, you verify your identity and financials virtually and sign all necessary documents electronically with the help of a computer.

Regardless of whether you do a remote closing or an in-person closing, you will receive a closing disclosure that lays out the critical aspects of your mortgage. It’s important to review all your closing documents so you understand the terms of your loan. Buyers who are new to having a mortgage or those who need a refresher may want to review important mortgage terms.

Remote closings, which are sometimes called virtual closings, digital closings, eClosings, or online closings, can also involve eMortgages. These are electronically created, stored, and transferred versions of traditional mortgage documents.

“The remote closing trend has exploded in recent years. The main players involved are the buyer, seller, title company, lender, and notary. Unlike traditional closings where everyone meets in person, remote closings let participants sign from anywhere with Internet access,” says personal finance expert Andrew Lokenauth. “One transaction I handled recently involved a seller in California, a buyer in New York, and a property in Texas. That would have been impossible with a traditional closing.”

Fortunately, much of the country allows for remote closings today, with at least 45 states currently permitting some form of it.

Rest assured that even if your state doesn’t permit a 100% remote closing, Rocket Mortgage^® can conduct at least a portion online. We now perform remote closings in one form or another in all 50 states.

How does a remote closing work?

A remote closing involves using the latest digital tools. These can include videoconferencing, online document sharing, and digital signing using apps or online resources. A remote closing can be fully remote and 100% online, or only partially remote with some in-person signings required (more on this later).

With a fully online closing, you’ll likely meet remotely via virtual video conference. If you’re buying a property, you’ll probably connect virtually with the seller, the real estate agents involved, and other necessary parties, such as a real estate attorney. Any payments to process for closing will probably happen via electronic transfer, and mortgage documents will be signed electronically.

“A remote home closing lets you complete the closing process digitally, without needing to sit around a table with the seller and title agent,” explains Baruch Mann, CEO of The Smart Investor. “Using secure platforms, you will review and sign all necessary documents online, often from home. Some forms may still require notarization, but that, too, can be done remotely through video calls. Funds are wired, IDs are verified digitally, and the whole deal can wrap up in just a few hours.”

However, not all remote closings are the same. Due to various eClosing laws across the country, it’s not always possible to close entirely online. Depending on your state, the process may be somewhat different than the one described above.

Let's take a closer look at the three main eClosing models: the hybrid method, remote online notarization (RON), and in-person e-notarization (IPEN).

The hybrid closing method

Again, online closings are permitted in most states, but they can get a bit more complicated in other states. If your state's digital closing policy doesn't allow online notarization, you may be able to close on a mortgage using the hybrid method. In fact, most closings nowadays are hybrid closings.

With the hybrid method, before your closing date, you will electronically sign everything that doesn’t require a notary. By the closing date, you will meet in person with a real estate notary or closing agent and sign the rest of your documents to secure your financing.

While this method isn’t fully remote, the good news is that it’s perfectly legal across the country. That’s because you will still sign the important documents in person. Plus, the closing process is faster because you will make payments and sign some documents before your scheduled closing date.

Remote online notarization (RON)

If you want a 100% remote closing, opt for remote online notarization, or RON. This lets you complete the entire real estate closing process from the convenience of your home. Instead of confirming your identity in person, you’ll simply jump on a video conference call on your closing date and present your identification, such as your driver’s license or passport, to complete the process.

In-person E-notarization (IPEN)

If you can’t use RON or the hybrid method, you may still be able to use digital tools to help you close, thanks to in-person e-notarization, or IPEN. This involves signing closing documents electronically but not remotely. An electronic notary can notarize without any paper involved, but they will need all parties involved in the closing to be physically present.

While this isn’t a truly remote closing, it cuts down on paper waste by using electronic documents, helping to secure your closing process by confirming your identity in person.

Remote closing FAQ

Let’s look at some common questions typically associated with remote closings.

What is a ‘wet signature’ and when is it required?

A “wet signature” refers to a real, physical signature on a document rather than an electronic signature. Thanks to remote online notarization (RON), all documents can be signed virtually if your state allows it. But some states that don’t allow permanent RON may require certain mortgage documents, like promissory notes or other closing paperwork requiring a notary signature, to be signed physically and in person. Some states or mortgage lenders may also require a “wet signature” for legal reasons, such as to help prevent fraud.

What has prevented remote closings from becoming more common?

Electronic closings have been around since before COVID-19 but weren’t widely available. Before, if you couldn’t attend a closing in person, you had to give a chosen representative power of attorney to sign on your behalf. Many states have updated laws to allow remote closings, but no federal standard exists yet, although growing state adoption and ongoing discussions in Congress suggest their popularity will keep increasing.

Will remote closings become the new standard?

Remote closings offer a convenient new way to buy a home or refinance, and they seem like the natural next step in real estate. However, while they could become the preferred method in the future, remote closings aren’t legal everywhere yet. Rocket Mortgage is committed to simplifying the mortgage process and can conduct online closings in some form in all 50 states. Even if your state prohibits remote online notarization (RON), you can still complete part of your closing digitally through a hybrid method or in-person e-notarization (IPEN).

Which states allow remote online notarization?

Currently, 45 states plus the District of Columbia have permanent remote online notarization (RON) laws. States without permanent RON laws currently include Alabama, Georgia, and Mississippi—though Georgia and Mississippi have recently introduced bills to allow RON permanently, and Alabama permits Remote Ink Notarization (RIN). Efforts continue in Congress to establish a federal standard, reflecting the growing adoption of RON nationwide.

The bottom line: Technology makes real estate closings more convenient

A remote closing is an increasingly preferred way for people to complete their home purchase or refinance entirely online, without meeting in person. Convenient digital tools like video conferencing and secure e-signatures, along with the guidance of a human remote closer, make this all possible. If you want to speed up the process, save time and travel, and reduce paper waste, a digital closing is an ideal solution. Depending on your state, you may be able to fully close remotely via remote online notarization or take advantage of a hybrid closing method or in-person e-notarization.

If you’re ready to move forward and purchase a home or refinance your mortgage, you can apply online with Rocket Mortgage^® and capitalize on our eClosing capabilities.