Online real estate closing a 1st for Texas

Texas’ first all-digital real estate transaction closed this week, meaning that some notaries will start bearing witness to important deals with keyboard strokes rather than pen flourishes.

The deal was between Stewart Information Services, a Houston-based title and real estate company, and Georgetown Mortgage LLC of Georgetown, Texas. But there was no public servant with pen and stamp standing by.

Rather, Notarize, a Virginia startup founded in 2015, offered a sleeker version of a notary service, taking advantage of a 2017 Texas law that went into effect on July 1.

The law, which passed with broad support in both chambers, permits notaries to approve documents over a two-way videoconference rather than the centuries-old requirement that they give their stamp of approval in person.

Notarize, one of several companies offering digital notarization, was founded after Virginia became the first state to sign off on a similar law in 2012; since then, Nevada and Texas have followed suit.

In “e-notarization,” as it’s dubbed, documents are uploaded to the notary’s app or website and a webcam link is established between the parties. Clients must display their government ID and sign their names on the screen. The notary then digitally signs and stamps. For security, a recording of this back-and-forth is uploaded to the cloud.

In Texas, security on the process is tighter than in other states.

The notary has to either personally know the client or verify the ID through a thirdparty software and then ask the client certain personal questions to prove his identity.