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Buying

Buying From Afar? Try a Remote Closing

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remote-closing

It's common for sellers to skip out on a home closing -- all you have to do is pre-sign the paperwork and have the proceeds of the sale wired to a bank account.

But buyers? You buyers haven't been so lucky. You've had to take time off work, schedule a babysitter, and fight for parking near a title company downtown, all to sign a pile of papers and close on your new home.

And if you're trying to buy a home from out of state? Fuhgeddaboudit.

But now buyers have a more convenient option: the remote closing. You can close on your new home at your workplace, your favorite coffee shop, your hotel lobby (if you're traveling), or even your parents' kitchen table.

Most refinance transactions are already closed remotely, but purchase closings are relatively new -- and on the rise, our experts tell us. (Some options for remote closings have been around a little longer than others, but they depended on where you live. Now they're available pretty much everywhere.)

"So often, when I arrive to do a remote signing, it's the first time a borrower has heard of this type of convenience being available," says Patricia A. Hoffman, a notary with Notary a la Carte in Holly Springs, NC. "I feel like I'm part of an underground economy."

Aaron King, CEO of Snapdocs, a modern technology platform that simplifies out-of-office mortgage loan closings, says his company has seen significant growth in loans closed using its suite of online tools. Its mortgage loan volume -- all done through remote closings -- more than tripled in 2015, for an increase of 214% year over year.

"We're currently facilitating 25,000 remote mortgage closings per month and seeing 20% growth every month," King says.

How it works

When the closing is scheduled, the requester of the remote closing (usually your Realtor or attorney) lets the title company know where the buyer wants to close.

"It does not affect the closing cost in anyway on a purchase transaction, but on a refinance transaction there may be an extra cost," says Ismet Ismaili, closing manager at Proper Title in Northbrook, IL.

A borrower can usually request an out-of-office closing at any time during the mortgage process, but it's most relevant within a few days of the closing date.

"Sometimes the title company will learn that the closing must take place remotely the day of, in which case they can usually scramble to make it happen," King says.

You could get a better rate and terms

Remote closings could mean more than added convenience -- they also increase competition among lenders, which is a win for home buyers, King says.

"No longer are consumers limited to using mortgage lenders that have offices within driving distance," he says. "And more options make getting a better rate and better terms more likely."

But you also might be more prone to closing day hiccups

Before you decide to bag the office closing altogether, remember this: Purchase paperwork is filled with a lot of lingo that may be confusing or spark questions. And that may mean you want to be somewhere where you have all the necessary resources on hand.

"You may miss out on a good explanation of what you're signing if you're not at a title company or attorney's office where staff can readily answer those questions or provide explanations," says Deb Tomaro, broker associate at Re/Max Acclaimed Properties in Bloomington, IN.

Also, because out-of-office closings have many moving parts and multiple parties are involved, there is also a greater chance for a disjointed process and a communication breakdown.

But remote closings can still be a useful tool if you're buying from out of state or have other issues that simply won't allow you to be in the title office on closing day. Just remember: Since remote closings hinge on the ability to locate a mobile notary, you'll need to ask your lender, Realtor, or title company for recommendations early on in the process.

Then all you have to do is pick out the perfect place for you to close on your new home -- your way.

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