Editor’s note: This is the final article in a two-part series. Part one, "E-signatures a real estate reality," discussed industry adoption.
A message pops up in your e-mail inbox reading, "You’re been asked by your agent to read and sign these documents online. To do so follow these simple steps."
You’re asked to adopt an electronic signature and then proceed. You scroll down the pages, clicking on yellow "initial" and "sign" arrows. Then you hit submit, launching the contract into vast reaches of cyberspace.
Welcome to the world of electronic signatures. While they have been legally binding for a decade now for some types of transactions, only in the past two years have an increasing number of real estate agents and brokers bought into the technology.
E-signatures work much like your e-mail. You sign into a password-protected account, upload your document, type in the e-mail address of recipients, write a short note, click to sign and send it off. Just like that, it comes back e-signed by all parties.
Simple enough. Not so simple is finding the right e-signature service. DocuSign, EchoSign, GoPaperless, SutiSign, CoSign, Rpost, Adobe eSignatures and more are vying for your business. It’s a fledgling fragmented industry marketing an array of online services from certified e-mail systems to virtual filing cabinets.
Consider these questions when researching vendors:
- Can you can tap into industry templates and forms, and import and edit your own documents in various file formats such as Microsoft Word?
- How easy is it to track documents, have them viewed and exchanged easily by everyone and verify and authenticate the signatures?
- Can copies be automatically e-mailed and stored by other Web services, your company’s service or a separate e-mail account?
- Do you need to download special software?
- Can multiple users sign a document?
Signature formats vary by company. Some services ask you to adopt a computer-generated signature, giving you the option to pick a variety of fonts. Some allow you to upload your own handwritten signature. Others let you use your mouse to scrip the signature.
The cost varies from a monthly fee (around $15 to $20 a month for one user) to a single charge per transaction. There also are free services. Palo Alto, Calif.-based EchoSign, for example, let you handle up to five documents a month without charge. Another leading company, DocuSign of Seattle, has partnered with the National Association of Realtors to offer a member discount.
Nancy Flynn, founder and executive director of The ePolicy Institute, stresses the importance of choosing a service that meets federal and state legal guidelines. This ensures your documents are safe. Forty-seven states and Washington, D.C., have adopted their own e-signature laws while New York, Illinois and Washington recognize only the federal legislation.
"Be sure your vendor has the capabilities to support your organization’s legal and regulatory compliance needs," Flynn said. "If you become embroiled in a lawsuit or regulatory audit, you’ll need to produce legally admissible e-mail evidence."
Once you’re ready to take the plunge, contact a couple of companies and ask them to walk you through their e-signature process. Like shopping for new car, take a test drive to make sure the company’s features meet your needs. Take advantage of free trial periods. Try it out slowly by starting with a basic listing agreement. Then gradually expand to other documents as you and your clients become more familiar with the technology. Listen to your clients’ feedback.
"Some customers will never be comfortable receiving, reviewing and signing documents electronically," Flynn said. "Realtors … need to be sensitive to customers’ comfort levels."
For e-signature converts, it’s just a matter of time before others follow suit.
"One agent (told me) I don’t like it," said Jen Bowman, a broker associate with Keller Williams Realty in Decatur, Ga. "If they don’t use it, I think they are going to be left behind."
Gilbert Mohtes-Chan is a freelance writer in California.