HABITAT Magazine

A couple recently closed on an apartment in a homeowners association electronically rather than in person. They assumed their real estate agent had told them everything they needed to know about the deal. After the closing, however, the buyers were surprised to learn about expensive aspects of their new home, including a separate HOA tax. Should the buyers have demanded an in-person closing? Are there risks that first-time buyers, in particular, should be aware of before they agree to a remote closing?

Most real estate closings — that momentous occasion when documents are signed, money is transferred and keys are handed over — are conducted in person, replies the Ask Real Estate column in The New York Times. This allows the attorneys, brokers, notaries and buyers to communicate closely and iron out any last wrinkles in a deal. But remote closings, which allow buyers and sellers to finalize a sale without being in the same room, are legal in many states, and they became increasingly popular during the pandemic, including in New York.

It’s certainly more convenient to not have to assemble all those people in one place at one time. But is the convenience worth it?

“It’s easier to have people in a room talking to each other,” says Lisa Lippman, a broker at Brown Harris Stevens in New York.

First-time buyers, especially, should press for an in-person closing so they can fully comprehend the process, all of the documents involved, and any last-minute issues that crop up, such as that unexpected HOA tax.

Remote closings can also take longer, as documents and checks have to move among parties at different locations. When everyone is together, the process often moves more smoothly; if one participant raises an issue, it can be addressed at the table.

Special circumstances, such as illness or distance, may make a remote closing unavoidable. No matter which course you choose, make sure that you get the closing statement ahead of time, Lippman advises. This document should list all financial aspects of the transaction.

All of this points to the importance of the buyer doing thorough due diligence long before the closing date.

“Whether you have an in-person or a remote closing, it’s a matter of the information you’ve gathered beforehand,” says Andreas Cristou, an associate at the law firm Woods Lonergan.

Fees, assessments, taxes, and maintenance or common charges should be disclosed before you sign a contract to buy the home. If, say, your seller’s tax bill is low because of tax breaks he might receive, or if you will have to pay a “mansion tax,” you should know that, too. Your broker and lawyer can be good resources, and if you’re buying in a co-op or condo, you can ask the board or building management for information about the costs to live there.

This should all be set in stone before the closing, whether it’s remote or in-person.