Sunny Los Angeles is not only the second-largest city in the United States, it’s a metropolis full of homeowners who are constantly on the move. Many Los Angeles residents travel often and own multiple homes in different cities. With all that traveling comes more and more responsibility for real estate agents to keep up with their clients on the go.
Navigating the sprawling Los Angeles landscape is about to get easier. Notarize can help real estate agents and their clients complete mandatory notarizations anytime, anywhere. According to Paul Salazar, luxury estates director in Beverly Hills, an online notarization process is a “game changer” for the industry.
But while Notarize may enable agents and clients to check tasks more quickly off of their ‘to do’ lists when it comes to buying, selling, or renting, users still face challenges. Those who aren’t as tech savvy may take a longer time to warm up to this streamlined closing process. Furthermore, not everyone is familiar with these options; even seasoned real estate agents like Salazar, who has been in the business for over 16 years, has only just discovered online notarization software. And with increased digital solutions comes increased threats to digital security.
All pros and cons considered, here’s everything you need to know when taking a digitally-focused approach to the Los Angeles housing market.
Real estate agent Paul Salzar’s first eClosing happened just this year when his client was selling his $6 million dollar estate in Los Feliz from the comfort of his Saint Barts home. But without a U.S. embassy on the Caribbean island, the client would normally have to fly back to Los Angeles to notarize required documents . With eClosings, he was able to notarize the grant deed and proceed with the rest of the sale, all without having to make the trip back to the United States.
Consider that not all eClosings work the same way. Some lenders may pick and choose which online elements they want to offer their clients, while others opt for a fully-digital process. If only some elements are done online (contract signing, for example), the process is referred to as a hybrid eClosing.
Although this may be great news for those looking to save a trip, some agents may fear a loss of in-person notary meetings can cause a domino effect and eliminate the need for agents altogether. Salazar assures that while he doesn’t think any client enjoys the process of in-person notarization, having a live real estate agent is still a critical component when it comes to buying or selling a property as there can be “many challenges that arise in every transaction.”
In fact, advancements in the online real estate space allow Salazar to spend less time on ensuring that the right document is signed on time, and more time servicing clients.
Sure, moving real estate processes online helps save paper and is beneficial to the environment no matter where you live. But utilizing technology — for example, eSignature platforms — can even reduce the infamous Los Angeles traffic-related pollution.
Consider that in the state of California, the typical mortgage closing requires 108 signatures and initials from buyers. The number is even higher when it comes to sellers. Rick Doten, an expert on cyber security, used mostly eSignatures when he recently closed on a house and during his refinancing. He explains how starting even a few years ago, mortgage processes are luckily 90% digital, with the exception of a few documents requiring signatures in person.
Salazar mentions how going digital means he and his clients can renew properties, sign, and send documents all without having to contribute to the already-congested city traffic. Zoom and Google Maps also help his clients explore the neighborhood and schedule virtual meetings without having to set aside full afternoons to meet or navigate a specific area. An added bonus? This saved time can be made to support more of Salazar’s clients, wherever they are.
While all these digital improvements may be helping the environment and easing the stress of local Los Angeles residents, it’s important to remember that at the heart of real estate, location is still everything. With an increase in digital tools making buying and selling easier than ever before, investors can now snatch up real estate browsing online from across the globe.
Doten warns that this may be damaging to local communities. Without needing to be in-person to buy, sell, or see and scope out a local area, investors may be more tempted to complete large transactions digitally. Unfortunately, this may create a lack of community in certain neighborhoods if residents find themselves being priced out of new areas, while buildings (and sometimes whole blocks) sit empty. Preventing new families from entering the community can reduce support to local businesses, school enrollment, and participation in local youth centers or sports and other activities. Even after purchasing an investment property, some investors choose to maintain the building without turning it into a local business, therefore depleting an opportunity to add to the community.
A delicate balance is required between maintaining those tangible, and often intangible, things that make up a community, while allowing flexibility and ease for international buyers and sellers when it comes to their investment goals.
With all the ease and convenience that digital tools can bring, agents and clients must continue to familiarize themselves with digital security threats. Doten, a cybersecurity executive of large US healthcare company, encourages clients to use a trusted, private network. This way, you can prevent hackers from compromising your systems and your clients' personal information.
But security measures don't just stop at trusted, private networks. A two-way authentication process is a great way to validate that each end of your connection is authenticated. Let's say you are trying to connect to an online bank. A digital "handshake" (part of a two-way authentication) can confirm that you are connected to the bank and that the bank is indeed connected to you. This process ensures that the entity communicating with your computer is not compromised by a hacker attempting a man-in-the-middle attack to capture your data.
Enabling a two-factor authentication process is another way to increase security. A two-factor authentication process is different from a two-way process, explains Doten, and is one that most users are familiar with. After receiving a user's username and password, a site can send a text with a OTP (one-time passcode) to the user's cellphone. The user's second step is entering this passcode into the site.
Take the example of Salazar’s client who was operating from his home in the Caribbean, and participating in an eClosing on his house in Los Angeles. A safe and evolved digital provider would be able to offer multiple layers of authentication. If the entity recognizes that it is Salazar’s client’s first time logging onto the eClosing software from his location in the Caribbean, the client should be required to verify their identity on a second device and/or answer dynamic knowledge-based authentication questions to validate that they are who they say they are.
Doten also describes how online security measures are applicable to providers as well. For example, when he was closing on a house a few years ago, he was happy to see his mortgage lender warned against phishing emails. These emails may include illegitimate links asking for Doten to wire money, and are unfortunately a common occurrence whenever clients are about to close on a house. The lender confirmed the specific URL that they would be sending as well as their email address so that Doten knew to stay clear of any scam links.
Whether you are still dipping your toe into the world of digital real estate, or you’ve already gone through a few fully-digital eClosings, it’s no secret that real estate is increasingly embracing the land of digital. Real estate professionals need to continue to adapt to the ongoing digitization that is taking over the industry so they can guide and best support their clients.