First: a word of caution

Group Organizer

Jun 9, 2008 3:07:13 PM

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Using electronic signatures in the practice of real estate poses a few unique hazards. Seth Weismann is the General Counsel for the Georgia Association of REALTORS(r). He has written all of our contracts and special stipulations for the past 15 years. Smart guy.

I went to a class he was teaching to learn about the changes in some of our forms and I cornered him during the afternoon break and asked what he thought about electronic signatures. His answer was something close to "They are legal. They are available. And if you use them you are making yourself a target for litigation."

It was not an unexpected answer. Part of Seth's reasoning was that electronic signatures have not been tested in the courts yet. Likely as not, when we first started using faxes there was a court challenge as to the legality of the new technology. Once that little firestorm passed, we all became very comfortable using fax machines. What we need is a volunteer to get the first esig lawsuit out of the way.

I suspect that at some point, someone's client is going to get their nose out of joint and want to get out of a contract. They'll hire an attorney who will notice that certain docs were signed electronically and off to the courts it will go.

My ONLY point in all of this is use good judgement. First and foremost, talk with your broker. If he/she is okay with esigs, bust loose. Read! REALTOR.org has some very good articles on the subject. I use esigs on regular basis (I just did one today!). But I am careful. No attorney is every going to give a rip if I esign an Instructions to Closing Attorney. The fight will come over something like the purchase and sale agreement itself.

And one final note: the conversation with Seth took place over a year and a half ago. I heard via someone that works closely with his law firm that they have started using electronic signatures.

Edited by Buddy Snipes on Jun 9, 2008 3:22:09 PM

Tom Ikonomou

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Aug 6, 2008 5:04:12 PM

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Very well said. I think it will only be a matter of (when something goes wrong) before the we see how much integrity esigs really have.

Don Cook

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Aug 31, 2008 12:08:32 PM

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I use docusign from time to time, but I admit I'm a little nervous about it. As always, the circumstnaces dictate use of electronic signatures. In the past year, I've had 2 transactions with people in China. Without the ability to send the amendments back and forth by email,I don't think we would have made our contract dates. To protect myself, I always send a companion email explaning the details as well as send an email confirming the receipt of the signed documents. Only a lawyer could say whether or not this helps my liability exposure, but it does help my comfort level.

I've since used it more frequently and plan on continuing.

Don Cook, REALTOR®
DonCookHomes.com

Judy Sepac

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Aug 31, 2008 12:15:21 PM

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Don Cook said,

I use docusign from time to time, but I admit I'm a little nervous about it. As always, the circumstnaces dictate use of electronic signatures. In the past year, I've had 2 transactions with people in China. I've since used it more frequently and plan on continuing.

**Don, I doubt if a lawyer would know the answer either unless it's been tested in court. Remember, anyone can sue anyone for anything. and it sure seems they do. Good luck to you and just do what you feel is always in your clients best interest, keeping good notes! Sounds like you are! Judy

Yozons

Group Member

Aug 31, 2008 4:59:33 PM

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It's not true that electronic signatures are untested in court. There are many cases that have upheld the legality of electronic signatures in many different forms, including simple email agreements.

Furthermore, unlike the fax machine, electronic signature were legalized throughout the U.S. by the Electronic Signatures in Global and National Commerce Act of 2000.

While Yozons does not do a lot in the highly fragmented real estate market (only those with larger numbers of agents who need a consistent platform and broker access to the forms data tend to use our services), I wanted to be sure to clear up this confusion -- some gory details about the law can be found at: http://library.findlaw.com/1999/Jan/1/241481.html

Good luck!

Buddy Snipes

Group Organizer

Aug 31, 2008 5:57:26 PM

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Terrific article. Thanks for the link.

To your point about "untested": that conversation was strictly in the context of residential real estate. Certainly esigs have been in use by many entities (military, academia, government) but, as usual, real estate is a late adopter. This is new territory for us. Every real estate attorney that I have talked to is approaching esigs with caution. I do err on the side of being very conservative in this matter when I am writing. In my business, however, I'm a smidge radical.

Ryan L Siegmeth

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Sep 15, 2008 1:41:51 AM

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I do use adobe professional and the purchased e-signature within. It is something that I use lightly and not in purchase contracts. In my opinion there are two problems at this point. The first is that we are on the legal edge of this type of signature being accepted in real estate and the other is the fact that not many yet have the education & resources on the other end of a transaction. Until some standards are set in our field it is something, in my opinion, should be used with caution.

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