Online closure of home sales? Yes, it’s possible in Texas now
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Joseph A. Garcia, BIC
Christina Sotelo, BA
808-329-3121
www.konahomesandrentals.com
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West Hawaii Real Estate | July 20, 2018 13
Texas’ first all-digital real estate
transaction closed this week,
meaning that some notaries
will start bearing witness to
important deals with keyboard strokes
rather than pen flourishes.
The deal was between Stewart Information
Services, a Houston-based title
and real estate company, and Georgetown
Mortgage LLC, of Georgetown,
Texas. But there was no public servant
with pen and stamp standing by.
Rather, Notarize, a Virginia startup
founded in 2015, offered a sleeker,
sexier version of a notary service,
taking advantage of a 2017 Texas law
that went into effect on July 1.
The law, which passed with broad
support in both chambers, permits
notaries to approve documents over a
two-way video conference rather than
the centuries-old requirement that they
give their stamp of approval in person.
Notarize, one of several companies
offering digital notarization,
was founded after Virginia became
the first state to sign off on a similar
law in 2012; since then, Nevada and
Texas have followed suit.
In “e-notarization,” as it’s dubbed,
documents are uploaded to the notary’s
app or website and a webcam
link is established between the parties.
Clients must display their government
ID and sign their names on the
screen. The notary then digitally signs
and stamps. For security, a recording
of this back-and-forth is uploaded to
the cloud.
In Texas, security on the process is
tighter than in other states. The notary
has to either personally know the client
or verify the ID through a thirdparty
software and then ask the client
certain personal questions to prove
their identity.
Some notaries were skittish about
the prospect of online notarization.
Before the bill passed, the Texas
chapter of the American Association
of Notaries asked people to digitally
sign onto a letter to lawmakers opposing
the legislation because digital
notarization would “compromise
notarial acts.”
The association argued that webcams
don’t allow notaries to verify that
nobody is coercing a signing party
and that the digitization of the process
could put notaries out of work.
The law passed after lobbying
from various players in the real estate
and business spheres, including Stewart,
Notarize and the Texas Association
of Realtors.
“It was making sure that Texas
laws were staying up to date with
what’s happening in the marketplace,”
said Daniel Gonzales, director
of legislative affairs for the Realtors’
association. “More and more mortgages
and real estate transactions are
going to be occurring electronically.”
He said the main benefactor of an
initiative like this is the consumer, not
any corporations. It’s saving people
travel time, though not necessarily
money — the state set the maximum
cost for digital notarization at $25, a
big jump from the $6 limit for the first
in-person acknowledgement.
And while Gonzales concedes that
all new technologies introduce some
degree of risk, he said he hasn’t seen
any problems.
Real estate isn’t known for its technological
progressivism. But the industry
is changing, whether to catch up
to other industries or attract younger
audiences, said R. Byron Carlock Jr.,
the Dallas-based national real estate
leader for PricewaterhouseCoopers.
With sites like Zillow and Trulia,
online-only discount brokers, e-signatures
and now e-notarization, home
buyers can choose and buy a house
and get a mortgage without leaving
the sofa, so long as loan underwriters
feel secure.
Consumer and auto financing
have found homes online. Consumers
can apply for credit cards online,
get their limits raised online, apply
for and even tour apartments online.
It was a matter of time before the
home buying process — and with it,
a notarization experience that’s been
virtually unchanged since the advent
of the self-inking endorsement stamp
— caught up.
“Real estate was a slow adapter.
We used to say it functioned as an
analogue industry in a digital world,”
Carlock said. “Now billions of dollars
of venture capital has flooded into
various prop tech initiatives.”
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