The past few months have been a whirlwind of emotions for many people. As we all wrap our minds around the current situation, there’s no doubt that coronavirus has dramatically affected the way we live and how our society operates. There is no clear answer on when things will be back to normal, but the real estate market persists.
While real estate continues to be an essential service, homebuyers and sellers will be required to evolve the standard process to protect against spread of the virus. The short answer is, yes, you can use remote closing to complete your home sale. In fact, over the last decade digital home closing has been a trend, but in this environment more people will be leaning on it than ever before.
Typical process to close a home
Home closing consists of a lot of moving parts that will require a little bit of creativity to adjust to the current social distancing measures. The good news is that the government supports real estate activity and the sector boosts the economy. As a result, lenders, lawyers and real estate agents are still very much in business.
So, don’t fret! As the closing date approaches for both buyers and sellers, there are ways that you can seamlessly close the sale of the home using the power of technology and other hybrid strategies.
Homebuyers and Sellers
- Obtain a home inspection
Normally a home inspection is necessary during the home closing process. The inspector, along with the buyers, would complete this together in-person. However, with social distancing measures you will need to determine other ways to get the home inspection checked off your list.
If sellers agree to have an inspector visit their home, new protocols seem to be that inspectors arrive alone and wear protective equipment such as a hazmat suit and respirator when inside the home. After the inspection is complete, they share their findings with the buyer using digital technology such as video conferencing.
Alternatively, homebuyers can choose to forgo the home inspection part of the closing if they don’t want to take these other steps. However, this can be risky, since inspections can turn up large repairs or other structural challenges in the home which buyers will likely want to know about prior to closing.
- Final walkthrough of the new home
Having the final walkthrough of a new home is important to ensure everything is in order and in the same condition as when the homebuyer signed the offer. In the midst of coronavirus distancing measures, there are other ways for buyers to have a final walk-through of their new home.
Buyers can ask sellers to leave the key to the property in a safe place (lockbox). If you’re a homebuyer, you can enter the home privately to complete the final walkthrough prior to taking possession. Wear a mask and gloves to reduce risk to both yourself and the sellers.
Alternatively, if you would rather not attend the walk-through and your real estate agent is comfortable, they can do this independently and virtually walk you through the home. With the aid of 360-degree video technologies, you’ll be able to see exactly what the home looks like in real time.
- Title Review and Title Insurance
Your lawyer will review the “title” (deed) to the home, which is the transfer of ownership between the seller and buyer. They will start the title search process to see if there are any obstacles that could stop the sale of the home. These can include zoning issues or outstanding mortgage payments by the former owners.
It’s also your lawyer’s responsibility to set up your title insurance. This protects you from any ownership challenges, including if the initial title review missed something.
Speak to your lender and lawyer to see if the title review and title insurance can be done to their compliance standards with digital signatures.
- Exchange of funds
It’s critical that all parties receive the payments they’re owed during the closing process. Typically, real estate lawyers would have cheques couriered with the homebuyer’s mortgage funds and down payment. However, now they are leaning on transferring funds digitally, with their accounts set up to accommodate bill payment and e-transfers.
This allows for a seamless exchange of funds between the two parties. The homebuyer can digitally transfer the funds to their lawyer and then their lawyer can digitally transfer funds to the seller on the closing date.
- Getting the keys
One of the best parts of closing your home is finally getting the keys! Similarly, the hand-off of the keys can be challenging since people want to maintain physical distancing. As a result, sellers may use a lockbox to leave the keys for the buyer on the property. This ensures it is a secure exchange for both parties, while reducing unnecessary risk.
Buying or selling a home in these conditions may involve taking a different approach. Yet, there are ways to close the sale of your home during this time. Discuss how you can make adjustments to typical processes with your real estate agent, lawyer, lender, and, home inspector.
Courtesy of REMAX.ca