Should You Switch To Electronic Signatures?
October 22, 2009
By: Michael LaPeter
Author's Website: http://mysinglepropertywebsites.com
If you’ve never heard of electronic signatures, the concept is simple: instead of physically signing documents, you sign a document electronically by typing your name, clicking with your mouse, or a variety of other methods. Electronic signatures come in many forms, and you’ve likely already used them without even thinking about it. If you’ve ever faxed a contract or attached one to an email, you’re already using electronic signatures.
The question is whether the time has come to make the switch completely by using companies such as Docusign (the only company I’ve personally used) to remove pen and paper from the process entirely. In terms of ease of use, there’s no comparison. If you’ve ever found yourself printing a document just to sign it and then scan it right back into your computer, then you can see the advantages of electronic signatures. Adding insult to injury, if you keep electronic records you’ve now got nothing to do with that paper but shred it and put it in the recycling bin, hopefully destined for a more noble purpose next time.
In California, the Association of Realtors offers it members Winform Online, which lets us draft contracts right online. It’s integrated with Docusign, so you can create a contract and prep it for signing without printing anything at all. Your clients are notified by email to sign, and you get an email as soon as they have. I’ve had contracts and extensions signed and returned by out of town clients in less than 10 minutes. As an added bonus, they can’t accidentally miss any spots to sign, since the program highlights each area and checks for completion.
So what’s the downside? While for starters, it’s not free. Pricing on Docusign’s website starts at $15.95 per month. For part time agents or those with low volume, the convenience might not be worth sacrificing the four lattes a month you could be enjoying instead.
The biggest drawback I’ve found, though, is that not all brokerages and companies will accept electronic signatures. In fact my most recent transaction involved Cartus, a large relocation company, and they would not accept them. I try to always check beforehand so I don’t look foolish in front of a client, but sometimes a third party will send us back to the starting line. I’ve also reviewed the legal resources available on the California Association of Realtor’s website, and there are some specific documents where electronic signatures are not allowed. I was hoping for a simple “yes, electronic signatures are legal and effective all of the time”, but at the moment it’s not that black and white.
In short, if your brokerage is not already currently using electronic signatures, you should certainly discuss it with your manager before making the leap on your own. If they are using electronic signatures, you should definitely take the time to learn more about it and give it serious consideration; I’ve found them to be a huge timesaver and well worth the cost. And of course, saving a few trees doesn’t feel too bad either.
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Jay Thompson on October 22, 2009 5:40 pm
DocuSign rocks my world. Clients **love** it.
As for those that won't accept them, DocuSign will help educate them.
RailLife on October 23, 2009 6:48 am
The service is invaluable in terms of time, paper trail, and integrety of the document. The old days of fax to agent, lender, title ending up with mush that you can't read is just one of many examples to think about.
DocuSign on October 23, 2009 7:19 am
Thank you for bringing your perspective about DocuSign, electronic signature, and weighing the benefits as well as considerations of adopting electronic signature for your business.
For brokerages and companies that don't yet accept electronic signature, we have been working together with various policy makers and influencers to understand their perspective on e-signature and provide them with information that they weren't aware of or hadn't considered. An example of this is: http://docusign.com/blog/2009/09/29/make-your-v...
Thanks again for the great post
Sam DeBord, SeattleHome.com on October 23, 2009 8:10 am
Looks like a great system – I don't believe the NWMLS has approved electronic signatures, though. Anyone? Have I missed an update? It's amazing, but Seattle's MLS seems to be last to the party whenever a new techology is available.
Michael LaPeter on October 23, 2009 10:06 am
Nick and Jay, I totally agree. I make sure to let out a long audible sigh on the phone whenever someone says their brokerage/ company doesn't accept them.
Thanks also for the feedback from Docusign, that seems like a great use of time on your company's part. It might not hurt to also contact associations like C.A.R (http://www.car.org) and work with them to provide more legal resources, F.A.Q.'s, etc.
Sam: That's too bad. It's funny how the cities you'd think would be at the forefront, like Seattle or San Francisco, so often lag. I remember watching my brother in Boise open lockboxes from his cell phone in awe, while in SF I was still toting around a separate brick of a lockbox key… oh well!
DocuSign on October 23, 2009 10:48 am
Hi Sam – DocuSign actually has realtors in the Seattle area who use electronic signature. Pardon my ignorance, but I didn't know that the NWMLS was a policy body or that you needed approval before implementing technology for your business. Any further information to further educated me would be much appreciated!
DocuSign has a 30 day free trial, so you can try it out first http://www.docusign.com/real_estate/
Top 5 real estate posts of the day for 10/23/2009 on October 23, 2009 8:55 am
[...] Should you switch to electronic signatures? – I made the switch myself in January and have not looked [...]
DocuSign on October 23, 2009 10:55 am
Michael, That's an excellent idea
Yes – DocuSign's Chief Legal Officer, Ken Moyle, is also the Public Policy Chair of the Electronic Signature and Records Association (ESRA) so he is very active in trying to create more legal resources, etc.
Ken gave a talk on the Legality of Electronic Signature for Real Estate at CAR EXPO earlier this month: http://docusign.com/blog/2009/10/06/quick-recap...
ps – if my links aren't helpful, please do let me know!
Sam DeBord, SeattleHome.com on October 23, 2009 11:39 am
I've heard of people using it here, too. The MLS doesn't control licensing, so your contract can be a legal WA contract with an electronic signature. However, if you're using the NWMLS's contract forms to write that contract, as an NWMLS member you're committing to following their rules for the use of those documents.
I'm not an expert on the subject at all, I just know the NWMLS had said “no” the last time an associate of mine asked if they could use the e-sigs. Between WA DOL, NWMLS, Realtor, and RE/MAX, there are a lot of intertwining rules that don't always match up.
Sam DeBord, SeattleHome.com on October 23, 2009 11:40 am
So true. Our software companies create the newest technologies and then have to sell them in other states.
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Design2Express on December 3, 2009 7:35 am
Nice info Michael I always think that when every thing is moving in electronically then how we sign our online checks so its make it easy now. thanks for sharing
Design2Express on December 3, 2009 3:35 pm
Nice info Michael I always think that when every thing is moving in electronically then how we sign our online checks so its make it easy now. thanks for sharing