The trend toward paperless closings

If you’ve ever bought a home, you know that the amount of paperwork generated can be overwhelming. After signing pages until your hand cramps, you take home a file folder full of documents. 

That’s just what you take home. Now consider the amount of paperwork produced when the selling and buying agent, the lender, the title company and the county (who keeps most of the records) all get copies. 

Now imagine the amount of paper we could save when you consider that according to the National Association of REALTORS®, 4.65 million homes were sold in 2012. It’s staggering. 

The road to a paperless real estate industry

The steps toward paperless real estate transactions include the Uniform Real Property Electronic Act, the Uniform Electronic Transactions Act, and the federal Electronic Signatures in Global and National Commerce Act. In 2000, use of electronic signatures was legalized in the United States. Although technology was lacking at that point to make doing everything digitally, it was an important legal hurdle because it enabled many industries the option of paperless transactions. 

By the end of 2005, counties across the country adopted electronic records management systems. Because the technology has improved and become less expensive in the last few years, that number has continued to grow. 

There have been obstacles toward a completely paperless transaction. Some real estate agencies, title companies and banks have been reluctant to adopt. But their number is beginning to wane. As the process has improved, they can see that it saves them time and money while improving the customer experience. 

The benefits of an electronic closing

For the home buyer, there are many advantages to a paperless closing. Of course, going green is a huge factor. Signing your name once and applying it electronically as you and your REALTOR® go through the process saves time – and a cramped hand. At the end of it all, you walk out with the records of your transaction on a CD rather than a file folder. 

For the REALTOR®, lender and title company, it saves on storage space. It’s more efficient to ship documents electronically than to copy every page and ship them. If one page is missing, it could hold up the entire process. From a record-keeping standpoint, it’s also more efficient to search digital records than paper records. As more companies adopt the technology and save money, they could pass the savings on to the buyers.

Although digital transactions are not available everywhere, make sure to ask your REALTOR® if a paperless closing is an option when you buy your next home. The trees will thank you!