Among the twists and turns that have characterized the real estate investment market in recent years is the increased interest in SFR properties among a variety of groups. SFR investment has broad appeal: institutional investors, experienced mom-and-pop investors and newer millennial and Gen Z investors all continue to make an impact in the investment market. eClosing technology has the power to appeal to newer entrants into the SFR space – as well as help investors looking to expand into different regions.
Today’s housing market requires that all types of investors explore new markets, which may be far from their operational base. Remote online notarization (RON) eases the logistical challenges of geographic expansion – and may be especially appealing for millennial investors.
Homebuyers demonstrate comfort with eClosing technology
The 2022 ServiceLink State of Homebuying Report revealed that 14% of Gen Z/millennials who recently bought a home cited obtaining an investment property/source of rental income as their reason for buying. Just 7% of Gen X and 3% of baby boomers identified their recent home purchase as an investment opportunity. Unsurprisingly, according to the 2021 ServiceLink State of Homebuying Report, digital natives Gen Z/millennials leveraged technology during their homebuying experience more than their Gen-X and baby boomer counterparts (89% Gen Z/millennials; 71%, Gen X; 33%, baby boomers).
“Consumers — especially millennials — are taking hands-on control of virtually every aspect of their lives using technology. They schedule ridesharing, make restaurant reservations, even buy cars through a fully digital experience. Why should the mortgage experience for their investment property be any different?” asks Marc Bator, vice president and principal product manager, ServiceLink.
According to a recent survey conducted by ServiceLink:
- 89% of consumers surveyed agreed that eSignatures are easy and convenient
- 88% agree that eSignatures save time in large transactions like obtaining a mortgage
- 79% expressed interest in using eSignatures specifically for mortgage applications
Using eClosing technology delivers today’s investors the experience they expect.
eClosing makes expanding into new markets easier
Competition for inventory continues to be fierce, which has necessitated that SFR investors expand their geographic footprint. Money Crashers recently listed the “15 Best Cities to Buy a Rental Property for Investment in 2022” and their list featured widespread locales including Orlando, Florida; Cincinnati, Ohio; Arlington, Texas; Colorado Springs; Colorado and more.
These dispersed markets mean that investors may more often be buying properties far away from their home base. Remote online notarization is available in the majority of states – including hot SFR markets like Florida, Texas, Maryland and Pennsylvania. This option allows investors to conveniently close on distant properties.
eClosing allows investors to be more nimble
Remote online notarization allows investors to close from their home, office – or even while traveling. This reduces the logistical complications associated with getting to the closing table and allows busy investors to maintain their day-to-day routines and travels without interruptions. Lorraine Perez, assistant vice president of single-family rental services, says, “At ServiceLink, we’re problem solvers. We’re prepared to get our investors to closing, no matter where they are.”
In states where RON is not permitted or when investors are borrowing from lenders who have not yet adopted remote online notarization, hybrid closings – where the borrower reviews and electronically signs part of the closing package prior to closing – provide a convenient option. Hybrid closings, which can be completed whether the closing event is virtual closing or in-person, allow the borrower to review the closing package prior to closing. This process cuts down on the amount of time spent at the signing event.
Hybrid closings have become particularly popular among lenders who choose to test the waters on a smaller scale before diving into full RON. They’ve become so prevalent among ServiceLink clients that the number of hybrid signings more than tripled from May 2021 to September 2021.
eClosing with ServiceLink
ServiceLink is prepared to support SFR investors and lenders ready to incorporate eClosing into their workflows. With a panel of hundreds of RON-ready notaries spanning a broad scope of states and working across many platforms, ServiceLink has executed thousands of RON closings, and collaborated with lenders of all sizes in various stages of RON adoption. “We have the people, technology and ideas to help in whatever capacity is needed on the journey to full RON,” Bator says.
Through a nationwide network of high-performing notaries, ServiceLink offers eClosing options for wherever investors and their lenders are on their digital journeys.
- Remote Online Notarization (RON): The borrower and notary enter a video session where the borrower eSigns and the notary eNotarizes the documents.
- Remote Ink-Signed Notarization: The borrower and notary enter a video session where the borrower physically signs the documents and then mails them to a notary for notarization. Availability of this process is based on temporary executive orders and varies by state.
- In-Person Electronic Notarization (IPEN): The borrower sSigns the closing package in-person with the notary, and the notary eSigns and eNotarizes applicable documents.
- Limited Power of Attorney Closings: The borrower signs one document, the limited power of attorney, in the presence of a notary. The rest is virtual closing.
- Hybrid Closings: The borrower reviews and signs part of the closing package prior to closing. This electronic review can be combined with remote online notarization – for an entirely remote closing – or with an in-person closing solution.
- Traditional Closings: The borrower and signing agent meet in-person to review, sign and notarize the closing package.
Our familiarity with the regulatory nuances of each market allows us to guide investors and lenders toward the right closing option for them.
Combining eClosing with ServiceLink’s title services for investors
Investors who utilize ServiceLink for both eClosing and title services experience the full benefits of a partner with centralized title and close capabilities. A partner with centralized title and close capabilities can speed decisioning and title clearance – ultimately getting investors to the closing table faster. According to Perez, “Since many SFR properties come onto the market as a result of foreclosure, a trustworthy partner who makes business-based title underwriting decisions and identify and clear any title issues as quickly as possible is critical. ServiceLink has in-house access to underwriters for accelerated decisions and a centralized team with no down-lining that doesn’t have to hand off to another title office. This greatly expedites closing, along with the cutting-edge technology used in the process.”
This technology is supported by teams of title curative specialists and other experts experienced in the nuances of SFR properties. Investors who leverage ServiceLink Title and Close, backed by this team, often find they can close about 10 days sooner than they would have going the more traditional route.
Learn more about ServiceLink’s offerings for single-family rental investors.