Key Elements Powering the Evolution Toward a Digital Real Estate Transaction Closing


The process of closing a residential real estate transaction has remained relatively constant for decades. According to DataTree by First American, more than 56 million homes were sold between the year 2000 and 2015, the year before the large-scale advent of digital loan applications. If you purchased one of those 56 million homes, your experience from the time you signed a purchase agreement to the closing of the transaction was largely unchanged. And likely unchanged from the millions of homes purchased in the 20-30 years before that.

Over the last few years, the home search and loan application processes for home buying have dramatically shifted toward a digital experience. Home buyers can search home listings and apply for mortgage loans via their mobile device or computer. However, the complex, paper-based closing process, which has long been a source of confusion for home buyers, has proven to be difficult to streamline and modernize, in large part because of the localized nature of property and title records, and legal and regulatory requirements that often differ from state to state.

“Data is the backbone of all digital companies. It drives decisions, automation, predictions, reporting and customer experience. It’s really that last item, however, that creates the biggest opportunity, because well-managed and controlled data can help drive a great customer experience.”

The Dawn of Digital Settlement and eClosings

The digital transformation of the residential real estate transaction closing is upon us. Shifting consumer expectations, increasing market pressures and momentum for regulatory changes are accelerating the adoption of digital settlement and eClosings. An eClosing is specific to the signing event in a real estate closing. It is the process in which the buyer, seller, borrower, notary or others involved in the transaction use an electronic signature (eSignature) to sign some or all of the closing documents.

Transformation is difficult, and it doesn’t happen all at once. Transforming an industry process requires thoughtful planning, cost and lots of effort. It’s a culmination of deliberate changes in pieces and parts. But, in the end, it results in something better – different, but better – which is the whole idea, of course.

Consider how we have already transformed our personal lives: banking, shopping, home web cameras, travel, photos/videos, transportation, streaming, even managing the temperature in your home. Just about everything we do personally now involves a digital component. Did we make deliberate decisions to change? Yes. Did it all happen at once? Of course not. And that’s how transformation occurs. The culmination of digitizing different pieces and parts of our personal lives transformed the way we live.

Leading the Transformation

First American is helping lead the evolution of the title and settlement industry amid this emerging digital landscape. The company has long been committed to applying state-of-the-art technologies to improve the real estate transaction for all the parties involved.

We’ve also aggressively pursued a variety of initiatives designed to deliver digital settlement and eClosing services that are secure and scalable. In fact, First American has already completed more than 500 hybrid eClosings across several states and the company is rapidly ramping up its eClosing capabilities.

It was not that long ago that eClosings were more hypothetical than reality. Embarking on the journey to develop and launch First American’s digital settlement capabilities required a carefully considered and deliberate approach. But, where do you start on such a broad effort?

The Key Ingredient – Data Drives the Modern Customer Experience

Data. And lots of it. Data is the backbone of all digital companies. It drives decisions, automation, predictions, reporting and customer experience. It’s really that last item, however, that creates the biggest opportunity because well-managed and controlled data can help drive a great customer experience.

Abundant and accurate data powers process automation, providing customers with visibility and control to do things on their own. We all experience this every day with good digital companies. We shop, return items, book travel, rent movies, pay bills, even monitor our kids’ grades online. Good data, and access to it when we want it, informs and empowers us. We like that.

Fortunately, DataTree by First American boasts the industry’s largest database of property and homeowner information, spanning 100 percent of U.S. housing stock and including more than 6 billion recorded document images. I’m fortunate because I get to work with the insightful experts driving innovation here at First American. We’re moving full speed ahead to bring home buyers and everyone involved in real estate transactions a better experience. And with more than 500 hybrid eClosings already in our rearview mirror, we’re on the right path.

There will be many more stories to tell as this adventure continues. Hope you’ll follow along.

Eddie Oddo is vice president of Corporate Business Solutions at First American Title Insurance Company and leads First American’s eClosing initiatives.