Imagine a world where you could close on your dream home without the hassle of a traditional closing. A world where you could sign documents electronically, from the comfort of your own home, while still having the security of an in-person closing. Well, my friend, that world is here, and it’s called hybrid closing.
Hybrid closing is the perfect blend of digital convenience and traditional security. It’s like having your cake and eating it too.
And the best part? It’s not just a pipe dream. It’s true, what’s happening these days is redefining the playbook for buying and selling homes.
What Is a Hybrid Closing?
Hybrid closing is a popular buzzphrase in the mortgage industry, as mortgage lenders, title and settlement professionals, and real estate closing attorneys decide which technology investments and digital modernizations to undertake. eClosing looks different for everyone. Some mortgage professionals opt for full eClosing, whereas others prefer to scale and begin by offering hybrid closing.
Definition of Hybrid Closing
On the other hand, a hybrid closing refers to a real estate closing process that combines in-person and virtual elements. In a hybrid closing, the buyer and seller may meet in person to sign some documents, while others are signed and notarized remotely. The goal of a hybrid closing is to strike a balance between the convenience and security of a traditional in-person closing and the efficiency and flexibility of an entirely virtual closing.
Lenders can rapidly scale hybrids, which results in tangible results, like more loans closed per employee and same-day funding. Once they’re closing the majority of their loans as hybrids, lenders can then add eNotes and RON without much heavy lifting.
There are many different ways to execute a hybrid closing. In its simplest form, a hybrid closing only includes eSigning of non-notarized documents. Because of this, hybrid closings are widely accepted and supported in the industry.
Difference Between Hybrid Closing and Traditional Closing
A hybrid closing is a type of digital closing where some of the loan closing package is signed or notarized in ink and the rest is electronically completed. The lender or investor’s preferences dictate which documents are wet signed versus eSigned. Hybrid closings offer the most successful path to digital closing adoption, so it’s important for you to know what a hybrid closing is and how it works.
The goal of a hybrid closing is to strike a balance between the convenience and security of a traditional in-person closing and the efficiency and flexibility of an entirely virtual closing.
How Does a Hybrid Closing Work?
A hybrid eClosing workflow can take many forms depending on your capabilities, preferences, and technology provider. Therefore, for the sake of explanation, we’re sharing one possible hybrid closing scenario with you below:
- Signers receive their non-notarized closing documents from the mortgage lender electronically with instructions for eSign.
- The signers electronically sign the identified closing documents before the in-person closing ceremony, including the mortgage note if the lender opts for an eNote.
- The remaining closing documents are presented to the consumer for wet signature during the in-person closing ceremony and witnessed by a notary.
Although hybrid closings include digital components, an in-person closing appointment is usually still necessary. This is because hybrid closings will always involve some wet-signed documents.
Even though an in-person closing is needed, the appointment is reduced from an hour to just 15 minutes. This is because borrowers can eSign 75% of a typical loan package prior to the closing.
Preparing for a Hybrid Closing
It’s a myth that adopting digital closings is an all-or-nothing endeavor, where you have to go directly from paper closings to full eClosings. The reality is that the middle ground — called hybrid closings — offers immediate time and cost savings, while also setting lenders up with a successful foundation to reach eClosings.
Types of Hybrid Closings
There are many different ways to execute a hybrid closing, including with remote online notarization and with non-notarized documents.
Hybrid Closing with Remote Online Notarization
RON and hybrid closings are two innovative solutions that offer a degree of convenience and flexibility for individuals looking to close real estate transactions. While both have their benefits, it’s important to carefully consider the limitations and requirements of each before making a decision.
Hybrid Closing with Non-Notarized Documents
There are many different ways to execute a hybrid closing. In its simplest form, a hybrid closing only includes eSigning of non-notarized documents. Because of this, hybrid closings are widely accepted and supported in the industry.
Advantages of Hybrid Closings for Borrowers and Lenders
Hybrid closings offer a number of advantages for both borrowers and lenders. Let’s explore some of the key benefits. RON and hybrid closings are two innovative solutions that offer a degree of convenience and flexibility for individuals looking to close real estate transactions.
Time and Cost Savings
The reality is that the middle ground — called hybrid closings — offers immediate time and cost savings, while also setting lenders up with a successful foundation to reach eClosings.
Improved Security and Compliance
The goal of a hybrid closing is to strike a balance between the convenience and security of a traditional in-person closing and the efficiency and flexibility of an entirely virtual closing.
Best Practices for a Successful Hybrid Closing
To ensure a smooth and successful hybrid closing, there are several best practices to keep in mind. Here are some key considerations.
Communicating with All Parties Involved
Similarly, while hybrid closings offer a balance between in-person and virtual elements, they may still require coordinating schedules and availability between multiple parties, which can be challenging.
Ensuring Proper Document Preparation and Execution
As a notary, you are responsible for understanding the differences between RON and hybrid closings and educating your clients on the best options for their specific needs.
Key Takeaway:
Hybrid closing is the sweet spot in real estate, mixing digital ease with the trust of face-to-face meetings. It lets you sign some papers online and others in person, making closings faster and simpler for everyone involved.
FAQs in Relation to Hybrid Closing
What is a hybrid close?
A hybrid close blends digital and face-to-face elements to seal the deal on real estate transactions.
What is hybrid signing?
Hybrid signing lets you ink some documents online while others need your signature in person, mixing convenience with tradition.
What is a hybrid loan?
This type of loan combines features from different kinds of financial products, like fixed-rate periods with adjustable rates later on.
What is a hybrid disclosure package?
A mix-and-match approach. Some disclosures come digitally for easy access; others land in your hands as hard copies for wet signatures.
Conclusion
Think of buying your next home; now imagine it with a hybrid closing process leading the charge into tomorrow’s market. It offers the best of both worlds – the convenience of digital and the security of traditional mortgage closings. Going for a hybrid closing lets you breeze through the process, cutting down on time and stress while making everything run more smoothly.
So, if you’re ready to take the leap into the world of hybrid closing, don’t wait. Talk to your real estate agent or lender today and see how hybrid closing can work for you. Trust me, you won’t regret it.
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