Pandemic Accelerates Changes in Denver Real Estate
The worldwide Covid-19 pandemic changed many aspects of life as we knew it. Like it or not, many of the changes we have experienced are a paradigm shift that will forever alter the way we do things. While change is not always easy, it often brings benefits in a new way of doing things.
A good example is the quick and massive adoption of online meetings. Eliminating drive time and solving the social distancing requirements, services such as Zoom and Google Meet have already proven to save time and money.
Realtors, unable to show homes in person, or host open houses, revised the way they worked with clients using virtual tours and live video streams to present properties. While most home buyers would like to preview the property in person, it was demonstrated through the shut-down that homes can be sold with little in-person interaction. The majority of homes sold in Denver that started with a virtual tour made it to the closing table.
Moving to a Full Online Transaction
As we move deeper into an full online sales transaction, much of the online solution is already in place. In Colorado, the contracts and documents needed to complete a home sale can all be completed electronically. Federal legislation was passed in 2000 authorizing the use of electronic signatures through the Uniform Electronic Transactions Act (UETA). With this, Denver home sales are routinely completed through web portals and e-mail, never printing a piece of paper. This includes the loan process as well, as many lenders are able to provide a mortgage loan with electronic documents and signatures, too.
But There’s A Catch
It would appear the home purchasing process can be completed from beginning to end on a tablet or laptop, but the closing process is still hampered by paper. In Colorado, many of the closing documents must be notarized and there is a requirement for the deed and note to have actual, or “wet”, signatures. This means printing paper documents and meeting in person with a notary to handle the final transaction.
The Pandemic Accerates Change
At the onset of the coronavirus and subsequent stay at home orders by the State government, the ability to perform a closing on a property was in peril. Buyers and sellers were often unwilling or unable to meet to sign the closing documents. To keep real estate transactions moving forward, Governor Polis signed an executive order that allowed remote notarizations, meaning a notary wasn’t required to be in the physical presence of the signer to notarize a document.
A process known as Remote Ink-Signed Notarization (RIN), closing documents are printed and delivered to the buyers and sellers for their signatures. Using video technology and a dedicated online platform, a notary holds an online session with the clients, confirming their identity, and then watches the signing of each document. Much like a Zoom meeting, the closing is performed live, but with each participant in different locations. Once signed, the documents are returned to the notary who then applies their notary seal.
Making it Permanent
Only half the states in the US allow this notarizing process, with Colorado being one of the states who failed to pass this legislation in previous sessions. Seeing the continued need for remote closings, Governor Polis extended his executive order last week, clearing the use of Remote Notarization to the end of the year. At the same time, the Colorado Secretary of State, Jena Griswold, announced legislation approving the use of Remote notarization had passed and would go into effect January 1, 2021, essentially making the Governor’s order permanent.
Coming Up – Part 2
New legislation brings Colorado real estate transactions close to an end-to-end online transaction, but only up to a point. Paper and wet signatures are still a required part of this process. Next issue we will look at the push to make the final connection to a fully digital transaction, and discuss the effects on the relationship between Denver Real Estate agents and their clients.