No pen necessary
Your Digital Signature, Please?

E-signatures have been slow to gain acceptance in real estate, but the benefits seem clear to many practitioners. Are you ready to jump on board?

BY MIKE ANTONIAK

Seven years have gone by since former President Bill Clinton signed a law that gave digital signatures on electronic documents the same legal status as pen and paper. But what seemed at the time to be such a promising solution for streamlining paperwork for real estate transactions has been slow to take hold.

Fortunately for fans of quick closings, that may soon change. More real estate professionals are testing out digital solutions to distribute forms and sign documents, and proponents are sensing that the technology is moving closer to mainstream.

“When you’re dealing with so many buyers and sellers from out of state, as I do, this helps gets things done in a timelier manner without worrying about chasing faxes,” says Leigh Brown, a broker with RE/MAX Signature Properties, Charlotte, N.C.

Brown estimates that she uses digital signatures and electronic forms in about three-quarters of her transactions.

“In the old days, real estate professionals had to print, fax, mail, or deliver documents to get them signed,” says Tom Gonser, cofounder and executive vice president of DocuSign, a Seattle-based company that offers digital signature solutions for real estate. “With just about everyone on the Internet today, there’s a much better way of doing things.”

How It Works

The concept of digital signatures might sound intimidating, but it’s actually very simple. Using DocuSign, for example, a buyer would click on a link in his e-mail to open a form on his computer. Within that form are yellow tabs to show where his signature is required.

To sign, the buyer clicks a “sign” button and the electronic signature he’s selected for himself appears on the form. The signature is stamped with the date and time. Service cost is based on the number of pages run through the system. For example, 10 documents that require signatures by one or more parties will cost $19.95.

So far more than 1,400 real estate companies have subscribed to DocuSign, and interest has really picked up in the last six months, Gonser says. The software now works with an array of popular electronic forms packages such as WINForms, ZipForm, and the RELAY transaction management platform. Gonser says the company plans to integrate its solution into other transaction management systems, which it expects to announce later this year.

There are other companies besides DocuSign that offer digital signature services. They include: VeriSign, Silanis, ProForce, and Adobe. However, these companies have not yet integrated their services into transaction management solutions specific to real estate.

Defeating the Resistance

Early adopters, such as Brown, say clients who are unfamiliar with e-signatures need some handholding to get started. She guides them through the signing process by phone. “The only negative right now is the learning curve for people who aren’t familiar with the technology,” she says. “But once you show them how easy it is, they’re amazed.”

Kevin Boer of Alain Pinel REALTORS® in Palo Alto, Calif., has been using DocuSign and WinForms for two years. He also meets resistance — not from his clients, but from other real estate practitioners.

“My clients are very tech savvy so they understand the advantages as soon as I tell them this is available,” Boer says. “But I’ve been evangelizing digital signatures to other real estate professionals for two years now and still haven’t had one transaction where both parties signed documents electronically.”

Boer’s not giving up, though. When submitting contracts and forms to practitioners on the other side of a sale, Boer includes an article from the CALIFORINIA ASSOCIATION OF REALTORS® explaining the benefits of digital signatures. He hopes the article will help combat misperceptions that e-signatures aren’t legally binding or that the use of such technology would not be embraced by consumers.

“The fact is this has huge benefits for us by streamlining our business and the amount of time and work it takes to close a deal,” he says.