Virtual Closing comfortable and safe?

Question

When you do million dollars deals and closing is done virtually (which one side picked as part of their terms and that firm normally does their closing online) how comfortable are you? I may be paranoid but it really feels safer to me to see buyer / seller in front of me with the attorney in charge, for some bizarre reason, when a person who had an online $100 or less class to become a public notary has the seller / buyer sign legal documents, I don't feel it's a safe way of verifying their identity and generally speaking I feel conducting these large deals with a table closing when all parties are present is way better.. or at least choose an agreed third party to verify identity of all parties (like a different law firm) is that just me being paranoid or is it a legitimate scare? what is your opinion?

Peter Walther · Answer

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Sharon R. · Answer

LOVE your tips. especially "use “forward” instead of “reply.” This lowers your chance of accidentally replying to a cybercriminal that sent you a spoofed email." good one!

Will defiantly use some of those, although most parties (who got used to the remote/ virtual way) will mostly use emails...I hope the SAFE protocol will catch up with the need. I do not feel it has yet.

Again, thank you for that. I think these are most useful tools and tips for us all.

Robert Rixer · Answer

Closings on commercial and otherwise larger deals are rarely ever done in person. I haven't been to a closing in nearly a decade. It's more to do with convenience as buyers and sellers on larger/commercial deals are often not located in the same state. As long as you have a proper representation, it should not be a concern.

Steve K. · Answer

You're smart to be diligent. Covid made remote closings a lot more common, perhaps before the proper protocols were in place for them. In my area title companies are making changes due to the recent uptick in wire fraud and identity theft. I also prefer closing in person but it's getting rare. Here are some ways to make virtual closings safer:

1. Be sure your security software, web browsers and OS are updated.

2. Verify everyone involved. Get contact info for everyone in the transaction at the beginning and verify that any info anyone shares with you is accurate. If someone emails you with a change to their contact info during the transaction, be suspicious and call the original number they gave you to check. Also check their website and make sure it's the same number. Check public records to make sure the seller is who they say they are. You can skip-trace people and use reverse-lookup software to see if the contact info you find that way matches what you've been given.

3. Avoid using email as much as possible, beware of attachments, get any wiring instructions over the phone and verify those wiring instructions by calling the bank back at the number on their website. Always check the sender’s email address for irregularities or changes. When responding to an email, use “forward” instead of “reply.” This lowers your chance of accidentally replying to a cybercriminal that sent you a spoofed email.

4. Be suspicious of these red flags: any last minute changes just before closing, anything sent via email, anyone insisting on using their own title company or notary, any title company or notary that your closer/agent hasn't used before. Anything that seems amiss like someone who needs to close from out of the country, anyone needing to close quickly or insisting on a cash purchase, pricing that is out of whack with fair market value for a property, anything off market, anyone sending the wrong amount of money (one fraud is to send more money than they should, then ask for the difference back, the money going to them is good but the money they sent is not), any buyer that makes an offer sight-unseen, or seller who can't meet at the property or doesn't want a sign at the property, anything that seems "off".

5. Make sure everyone involved has double or triple checking everything.

6. Make sure everyone has real ID.

7. Never email financial info.

8. Beware of incoming phone calls. Scammers can even spoof voices now making it difficult to tell whether a phone call is a scammer or your agent/title company/ closer. You might use secret passwords that you've agreed upon previously in person to tell if it's a scammer, or hang up and call them back at the number you know is right for them. A scammer might call you and tell you that they have information for you but they need to confirm your identity first then ask for sensitive info.

9. Avoid closing on Fridays or before Holidays. Fraudsters prefer these dates because it's the easiest time for funds to disappear before anyone notices.

10. Always get title insurance and pay more for extra coverage (it's usually cheap for the extra coverage).

10. Consider closing in person using a cashier's check if possible.

Ryan Miller · Answer

I get where you're coming from with the concerns about virtual closings, especially for deals as large as these. It’s true, there's a certain reassurance in traditional, in-person closings where you can see all parties and the attorney right there.

Still, virtual closings are generally secure and are backed by robust technology for identity verification, which should ease some worries. But let’s talk about the worst-case scenario you’re worried about. Do you feel that these risks could be mitigated with certain safeguards in place, like double-checking title insurances and ensure the third-party firm is repitable?What specific aspects are you most concerned about?

Virtual Closing comfortable and safe?

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