Those who believe pen to paper is still the gold standard for signatures may think it’s blasphemy, but I’m doing it anyway. I am using digital signing software to provide my clients leading edge, top-notch service in my real estate business, every day. While a digital signing option seems obvious in 2014, it’s actually fraught with varying opinions and controversy. Here’s my personal perspective as a business owner and real estate agent.
Up until a few years ago, a real estate transaction required about 5 pages of documentation. Today, thanks to our apparent need for more regulation, more oversight and more administration, the majority of real estate transactions in Alberta require at least 20+ pages of documentation. And we’re talking fine print documents that would put most lawyers to sleep. Clients can often be seen nodding off in my office as I explain the purpose and meaning of each page they are required to understand and acknowledge.
A prevailing belief in the real estate industry is that more administration (read: paper) means more due diligence…
I totally disagree, but I don’t make the rules. I follow them. Seems that no matter how much paper we make people sign, Alberta has some of the worst mortgage fraud in the country. Go figure.
Here’s the thing: real estate transactions don’t happen in a vacuum. Like the human beings they are meant to serve, they’re messy. Indeed, various aspects of a real estate purchase MUST be in writing in order to serve the best interests of our clients. However, as the administrative burden increases, the more hair-brained things can get. Ask any agent who does more than a handful of transactions a year and you will get an earful about this. I guarantee it.
As a REALTOR®, I’ve spent more hours (maybe weeks or months?) than I care to count chasing down paper from clients and other agents, paper that must be sufficiently anointed with signatures, dates, times, and other details in order to create an accurate, legally binding contract. This is not to mention the piles of paper that must be signed before a buyer and seller even lay eyes on an offer:
> federally mandated identification form (minimum 1 page for each buyer or seller)
> buyer brokerage service agreement (minimum 3 pages)
> listing agreement (minimum 5 pages)
> agency disclosure form (2 pages)
Oh, and if we think we might be doing business with a criminal, we need to identify this in additional paperwork. (I cannot politely comment to this requirement, so I won’t.)
In 2013 the Canadian Real Estate Association (CREA) endorsed a digital signing service called Docusign®. Docusign® allows clients and REALTORS® to digitally mark up and sign documents. All that is required is an email address and an Internet connection. No paper. No scanners. No midnight runs to the office to send a fax. This has been a boon to forward-thinking real estate agents who need to do more with less in order to stay afloat (yes, despite public opinion, real estate agents don’t make a lot of money sitting around doing nothing).
Clients of course appreciate the convenience and ease with which they can approve and sign documents too. Consider the logistics for buyers who write an offer on a home in Lethbridge but live in another city. Or, perhaps you’re a Seller who accepts an offer on your Lethbridge home. Then you have to get on an plane to some far flung location for business. You will need the ability to sign off on aspects of that transaction later in the week. Digital signing makes this a breeze.
But to be fair, let’s identify the Pros and Cons (given that the pros FAR outweigh the cons in my own real estate biz, I have an admitted bias):
The Pros of Digital Signing Software in Real Estate:
Accurate, cleanly written legal documents: Ever tried to interpret a contract that’s been chicken scratched, multiple times by multiple people? Worse, I’ve stayed up until all hours of the night coaching clients by phone, email and text on how to properly sign and date a contract from afar. Or they sign it and scan it and the scanned image is so blurry or distorted that no lawyer or lender would touch it with a ten-foot pole. With Docusign®, you can’t make a mistake because the REALTOR® marks up the paperwork digitally and in turn, the software will NOT let you finish your signing session until every item tagged for signing is completed.
Ability to meet signing deadlines (without declaring insanity): Yes, I know, we wealthy REALTORS® should stop complaining about the ridiculous hours we keep, but if you had to spend your Saturday evenings coaching clients by phone on how to correctly sign and scan a waiver notice, you might sympathize. It’s beyond inefficient. It puts otherwise legitimate deals at risk and makes clients and their agents super cranky too.
A true paper trail that is tough to refute: During a negotiation there is often a counter offer, a counter to the counter, and maybe multiple counters after that. Obviously, the best thing to do if the paperwork gets messy is to write a new, clean contract. However, even if there is only one counter and the other party is, shall we say… messy, it is tough to know exactly who initialed what and when. With Docusign®, there is a digital footprint of every single initial and signature. Should something go to court, this digital trail could prove invaluable.
Digital communications are less wasteful: Though I still burn through my fair share of paper, I certainly use a lot less when I can fill out a PDF form on my computer and email to a client for digital signing. The client never touches a piece of paper because s/he doesn’t need to print the document, write on it, and then scan or fax it back. Yet I can choose to print what is necessary for conveyancing or other types of reference.
The Cons of Digital Signing Software (Sort of):
Pen to paper may be more legitimate in a court of law: As of this writing and to my knowledge, digitally signed purchase agreements haven’t been tested in Alberta courts. A human being putting pen to paper may create more certainty around who signed the document, and handwriting analysis can help with this. That said, we know for a fact that clients and their agents are already forging signatures, often as a matter of convenience. It’s wrong and don’t ever let anyone convince you to do it! That said, all real estate transactions contain a degree of risk which can’t ever be 100% eliminated.
Clients may not understand what they’re signing: It’s very easy to click through a document and approve its contents without reading or understanding the terms and conditions you’re agreeing to. Unfortunately, this problem is a longstanding one, and happens when clients put conventional pen to paper as well. As with any longwinded legal document, the tendency is to “just sign it” and worry about the details later. Always ask your REALTOR® if you’re unsure about anything you’re about to sign, digitally or otherwise. And of course, a good REALTOR® will educate his/her clients regarding each step of a transaction.
My clients are, without a doubt, over the moon happy with my digital signing process. They also feel comfortable discussing ANY concerns they have at ANY point before, during, and after a transaction. I also proactively explain things to clients so they’re not left feeling pressured in the 11th hour to sign something they feel confused or uncomfortable with.
A Final Word on Doing Business in Alberta’s Real Estate Environment…
A wise client said to me many months ago, “It doesn’t have to be hard.” Organized real estate in Alberta has become both complex and chaotic. Much of that chaos stems from increasingly complex regulation and administration. Some of the chaos is also created by agents and consumers alike who don’t believe purchasing a home demands a minimum level of diligence and respect for process. (Some folks put more effort into selecting a pair of shoes than they do selecting a real estate agent, but I digress.)
It’s my belief that technology like Docusign® can be used in a responsible manner to improve the real estate experience for everyone. Change is hard, but history also proves it’s both inevitable and necessary. It should also go without saying that technology cannot replace the human experience. However, when used strategically, it frees us up to create fundamentally better experiences for our clients. Instead of chasing paper, we can spend more time creating something remarkable.
And for me, this is fundamental to my personal success as a REALTOR®.
Have more questions about digital signatures? Contact me right now!