
Amanda Farrell - 2 years ago
Buying a home is an important milestone for many people. In the United States, it’s a pathway to stability and key to building generational wealth. Specially trained notaries called Loan Signing Agents or Notary Signing Agents help homebuyers complete their purchases by guiding them through real estate documents that must be signed and notarized.
These documents are critical in transferring the title rights to the property from one owner to another. Notaries play a vital role in real estate transactions. Here’s a breakdown of why a notary is needed, who can notarize real estate documents, and what can happen if the paperwork isn’t completed correctly.
In general, notaries are public officials commissioned by their state’s governor to:
Some critical loan documents signed and notarized during a real estate closing are recorded in the land records system. These legal documents are sometimes referred to as recording instruments. Before recording, a notary stamp is required on some of these documents to assure validity.
Unfortunately, some criminals attempt to steal real property by falsifying and recording fake deeds. These crooks either convince an unscrupulous notary to participate or forge an unsuspecting notary’s seal to deceive the recording jurisdiction. The process of notarizing a document helps to deter fraud, business identity theft, and other crimes.
While the recording jurisdiction doesn’t take any steps to verify the credibility of a real estate document, other requirements must be met to avoid rejection. Professionals involved in the real estate transaction, including the notary, must execute these documents carefully to guarantee the new owner’s property rights. Otherwise, any misstep can lead to legal trouble.
Each state establishes rules for real estate transactions. Some states require an attorney to be present, restrict the notary fee amount, require additional licenses, or limit who can handle certain types of loan products.
So, the professional at the closing may change based on the location of the property. Buyers and sellers will work with one of the following:
In Texas, there is a restriction on a specific loan product called a Home Equity Line of Credit (HELOC), requiring the closing to occur at the permanent physical address of a lender, attorney, or title company. As a result, title companies and real estate law firms in Texas cannot hire a mobile or remote notary for this type of loan signing.
📰 Related Reading: Real Estate Professionals Every Notary Signing Agent Should Know
Not all the documents found in a real estate closing package require notarization. Most of the ones found in a typical loan purchase are forms and disclaimers that only need a borrower’s signature to show receipt of the document.
Documents that require notarization include:
✒️ Loan Signing Tip: The promissory note is another important lender document. This form is an IOU to the bank and a promise to pay back the loan. The borrower must sign it, but doesn’t it require a notary seal.
When presenting closing documents, non-attorney notaries must avoid unauthorized practice of law. You may not be able to answer some of the signer’s questions, which can be frustrating. Be sure to know where to find the contact information of the lender or title company so the borrower or seller can get clarification.
📰 Related Reading: 7 Tips for Your First Loan Signing
From accepting a buyer’s offer to finalizing the sale, the closing process can take anywhere from a week to 60 days. Depending on how complicated the transaction is, signing and notarizing documents can take as little as five minutes to several hours.
Some of the factors that affect how much or the type of paperwork include:
Some loan signings can take longer if the signer hasn’t had the chance to review the documents before closing. Notaries should consider these factors when planning their appointments.
The real estate documents that are signed, notarized and recorded establish absolute ownership and lien rights to a property. Notary signing agents and other professionals take great care to complete the process according to their state’s laws. If these documents aren’t executed correctly, it can lead to delays, cancellations, and financial liability.
If the deed or other instruments aren’t properly notarized and meet all the recording requirements, the recorder will likely reject the document.
Fixing the mistake of a notary costs a title company or real estate attorney time and money, and the notary signing agent is likely to lose a client. Worst case scenario is that the notary may be sued for negligence, loss their commission, and face financial ruin.
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