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22 Feb

Electronic Signatures

Posted February 22nd, 2007 | View Comments

Several months ago, I visited the subject of being able to provide buyers and sellers with the ability to sign their documents online. Recently when I was working with Mathew and Minie, the benefit of having the abilility to do this became even more apparent, because Mathew asked the (quite reasonable) question — Why aren’t Realtors® doing this yet? Look, you can do your taxes online, why can’t you sign your real estate paperwork the same way if you want?

When I last looked into this, I decided that the time and effort involved were not worth the trouble, because the main company that supported our real estate forms software had what I thought was a fairly kludgey solution requiring you to drag and drop electronic “sign here” stickies on each page. That’s not too onerous in itself, of course, but with a minimal purchase agreement weighing in these days at some 22 pages or so with disclosures, and given the fact that the last thing we want to do is hold up a buyer who’s ready to go, the process seemed to me to be too time consuming to be worthwhile.

I am happy to report, however, that our main electronic signatures provider, DocuSign, has recently released a Beta version of some software that’s destined to make this process much easier and faster to use, so that I think we’re ready to start serious work on rolling this out and making it available. This doesn’t mean that you have to use electronic signatures, of course — if you’re more comfortable working in person or by fax, of course we’ll still do business that way as well. I strongly suspect, however, that a lot of the folks who are users of this web site are the type of people who would find the convenience of being able to do their real estate paperwork online to be a real plus. For example, we often show people homes who live out of the area and who only decide on a purchase once they’ve gone home and “slept on it.”

Email software and web browsers have long ago replaced the fax machine as the communication medium of choice for many people. It’s time that Realtors® caught up with that, it seems to me, and got ourselves out of the dark ages.

  • Randy

    Real estate should be the holy grail for electronic signatures, with so many documents out there to be signed. The problem is that most realtors depend on referrals and face time in order to stand out from the crowd. Sure, there are times when an out of state signature would be useful, but they are not as common as you might think.

    The difficulty is that most agents think of mail (a few dimes) or fax (seemingly free) as good enough solutions when face-to-face doesn’t work, and they are more comfortable with paper since so many other documents will still be on paper.

    Handling both paper records and electronic records only makes life more complicated, and printing may seem like an option, but electronic signatures break down if you rely on a printed copy as your legal proof (anybody can create a printed document that says anything, and it will be printed with a non-verifiable “signature” that is not a hand-written signature).

    Some companies, unsure about DocuSign (there are others who do this, including alamode’s SureDocs which is free), don’t even digitally sign the agreements so the copy you get is only verifiable as long as the company is still in business. Considering the dot-com days and the likelihood of the failure of any company, entrusting your legal documents to a third party is rife for complications should they no longer offer the technology in the future.

  • http://www.echosign.com Joe Colletti

    If you’re looking for a way to speed up your transactions today– and start the transition to a paperless process– you might want to take a look at another company in this space, EchoSign (www.echosign.com)

    Their web-based application supports traditional faxed signatures, provides users with real-time signature status (what’s already in and what’sstill out for signature) and automated reminders, and delivers PDF copies of signed documents to all parties via email after signing.

    It also automatically uploads a copy of every signed agreement into a secure online archive, where it can be located, reviewed and even shared in seconds, even months or years later.

    The company also has an electronic signature option available, although its inability to place signatures in specific places in a document makes that feature less than ideal for real estate application right now. However people I’ve spoken with at company say this feature may be delivered later this year with enough demand from real estate professionals.

  • http://www.sacramento-home.com/real-estate-agents/ John Lockwood

    Well, thanks to both of you for some insightful comments. Randy, you make some points that I’ll want to look through as well as some that are less of a concern. The out of town buyer scenario happens quite often in my case, since my marketing efforts are largely internet based and therefore I get a large proportion of relocation business.

    I don’t mind converting the documents to paper for the other agent / party as long as I can offer the convenience to my clients, so that part’s not so much a concern. As for proving a signature, I don’t imagine an attorney would have too difficult a time with that given a recorded grant deed to back up the home ownership, and it seems to me the federal law at least puts the burden of proof on anyone trying to argue the signature is not valid.

    You do bring up some good points about some resistance I might meet as a more practical matter, and some issues I should look into further before plowing ahead boldly.

    Joe, thanks for the heads up. It sounds as though the signing facilities are a couple of generations behind Docusign, but I’ll give it a look. Not only do we need signatures in specific places, we need to be able to reapply sets of them to a given type of document, something Docusign is only now starting to support. The main win for Docusign is its easy integration with Winforms, which we use all the time. Plus using SettlementRoom on the transaction management end means we’re already using something designed for our industry.

  • George Pappas

    I am using a service that works very well called Sertifi. They enable me to get the documetns electronically signed or faxed and track the entire process. I agree with earlier comments, certain scenarios require electronic signature while other may require fax.

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