Work Smarter, Not Just Harder

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Real Estate Agent with Realty Executives

I am surprised at the number of agents and people that have never heard of electronic signatures. While not perfect for every situation, I believe DocuSign is a time and life saver in many situations. With our ZipForm program, it is very easy to send contracts, addendum's or any file to a client for an electronic signature. The document returns clean, legible and secure which surely beats a faxed copy! Better yet, any document can be sent for signatures, it doesn't have to be a "standardized" form. Many people love it because it is clean, easy and provides a great paper trail. Some agents will occasionally ask me if this is "legal" to use. Normally, I will send them a link to DocuSign.com..

I see that several people have written about e-signatures here, just wanted to throw in my two cents.

I am not saying we shouldn't meet face to face with people for contracts, disclosures, inspection notices etc. but there are many situations where electronic signatures come in very handy. I recently had a client (an IT guy) who was able to get a counter offer back to me from the lake! He was on his boat and has a laptop with a wireless card. While he didn't have access to a fax or a scanner, he did have access to his email. He simply opens the email, "signs" the document and returns to me. We were under contract while he was at the lake! :-) Works great for out of state clients, business travelers and many other situations.  Just to be clear, it doesn't work just with IT clients. I recall sending a counter offer to my mother in law when we were negotiating the sale of her home because I was curious to see how "easy" the service is for ANYONE to use. I gave her no warning, just sent the email and explained the situation of the counter offer. She LOVED it! Now, to say she isn't exactly a "computer geek" is an understatement. I am not sure what I would do with out this service now that we have been using it.

I could give dozens of examples but am curious to hear what people think. What do you think of lenders and escrow companies using this technology?

If you are not comfortable using a program like this, why not?

Edit.. Thanks for the questions from several agents!! - The client does not have to print the document. They are given a simple instruction to set up their electronic signature. Once they follow that simple instruction, they are able to click on the page, any place where we put a "sign here" or "dated" tab. Kinda like a sticky note. The document will not close unless all pages are signed and dated where necessary.  From our Zip Forms program or another document type, simply click on the print tab and choose electronic signatures instead of your printer, the document is then added to the program for sending to the client! Sswweettt!!

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Nick Bastian is a Tempe real estate agent specializing in the South East Valley and can be reached at 602-803-6425

Nick also writes a "hyper-local" blog about the communities, events, businesses and homes near light rail in Phoenix, Tempe and in Mesa.
Follow Nick on Twitter and on Google+!

 

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Anonymous #27
Anonymous
TGonser

Interesting thread on what I will call the 'ability to enforce' a signed writing.  DocuSign has focused its efforts on this over the years.  In fact, a Federal Act called ESIGN (Electronic Signatures in Global and National Commerce).  This Act gives a PROPERLY EXECUTED electronic document the same legal effect as a paper contract.  In fact, it goes so far as to say that an electronic contract cannot be denied legal effect solely on the basis it is electronic. In other words, you can't say "I won't accept your electronic agreement because it is electronic".  Now, to address some of the comments/ideas in the above thread.

1. First - the concept of 'Relative Risk'.  Of course nothing is perfect. However, DocuSign creates a lower 'relative risk' than fax signed contracts, or even paper signed contracts.  I think this because we tested it twice in 'Mock Trials' with actual sitting judges, attorneys, etc.  In both cases, the court found that the overwhelming evidence generated by DocuSign transaction provides a much lower 'relative risk' when compared to a paper contract, or a fax contract.  DocuSign provides an encrypted audit log of all events that happened - from your email address, IP address, time-stamps, and authentication measures.  This coupled with the fact that it is literally *impossible* to change a contract signed in DocuSign makes it a very strong medium for signing contracts - again comparing this to paper/fax. The DocuSign audit trail and encrypted documents create a very strong picture of what happened.

Lets compare this to paper. My signature is different every time. Nobody knows what it is SUPPOSED to look like so, what value is it to them?  Someone asks me to 'sign this and fax it back' - no way to tell if I changed something, if that is my signature, etc. Best thing you have is a fax number on the document, from my office or Kinkos.. lots of good that does you..  Literally ZERO evidence, and a pain to handle. Couple this with the fact that my only fax is at work or Kinkos, and you have a very real risk that I have ID theft options.  (88% of all ID theft comes from paper according to Javelin)  In court, a handwriting analyst will provide a very SUBJECTIVE guess as to who's signature is represented.

KEY THING TO UNDERSTAND: The fact RE uses fax documents for transactions says that they are 'willing to take the risk' that something will go wrong in exchange for going faster, just as merchants moved online to take credit cards 10 years ago, even tho it has higher cost and risk. It is a business decision. DocuSign just allows the transaction to go FASTER, but lower the risk profile.

2. DocuSign Additional Authentication - DocuSign allows the sender to define the level of authentication they wish their signers to pass in order to sign.  This is really an unlimited list of tools, but out of the box we offer 3 - email auth, access code (a one-time password), and ID Check - a service provided by RSA that nearly every large bank uses to ID remote users for financial transactions.  There are others, but they require integration.  These 3 may be used one-off or all together. There is actually nothing preventing users from going even farther and using the in-person mode of signing to actually notarize if they wish.   Going along with 'relative risk' because 99% of real estate transactions happen on paper or fax, these additional levels of authentication are not needed, but they are available if the sender wishes to increase the authentication level on a document.  

3. Counterparts - Because we are all signing the SAME DIGITAL MASTER, DocuSign eliminates the messy need to sign in counterparts.  DocuSign enables all parties to sign the same document no matter where they are. Once signed, a single master record exists, and all signers are given a copy.  DocuSign is even able to handle Chattel - 'enotes' and 'eleases' - which need to be managed even TIGHTER than standard contracts like RE agreements.

4. DocuSign and ESIGN.  We do all the work behind the scenes to ensure your contracts will be ESIGN compliant - from use of the Consumer Consent, adoption of the signature, exact placement, audit trail, encryption, hashing, and managing records in secure environments.  All of this work is done ON EVERY TRANSACTION so that if anything ever does go to court, generating all the 'evidence' of signing can be done in a tiny fraction of the time it would take with a paper or fax contract.

So, the net-net on DocuSign -

 

  1. Faster than paper/fax certainly, and much more convenient for the customer
  2. Lower 'relative risk' than paper/fax, lower risk of ID theft due to paper flying around kinkos or the office
  3. Integrated Authentication tools allow sender to determine what level of auth is needed, if needed
  4. Eliminates the need to deal with counterparts all together
  5. Warrants that contracts executed through the system are compliant with Federal ESIGN Act
  6. Used by Fortune 100 companies for millions of transactions per year
Finally, DocuSign has ALWAYS supported people retaining their own counsel to evaluate and compare DocuSign to paper, fax, and other methods.  It always results in a very positive finding that says DocuSign provides a lower 'relative risk' -  no matter if you are working in RE law in California, or worldwide contracts through a Fortune 100 company.

TG - DocuSign

 

July 20, 2009 07:11 PM
Rainmaker
250,621
Jay Thompson
Zillow

"Insofar as the ink of the pen, clearly the pen's ink doesn't trace the signature to anyone, but if it is established in court that the ink in the signature came from a BIC pen and the purported signer of the contract owned a BIC pen, then in the context of all the evidence it simply adds one more nail to the coffin."

That would be one flimsy nail.

According to various sources across the internet, more than 100,000,000,000 (that's one hundred BILLION) BIC pens have been sold.

Attorney: Mr. Thompson, according to chemical analysis of the ink in the signature on this contract, it was signed with a BIC pen. Have you ever purchased or owned a BIC pen?

Mr. Thompson: Yes, I have purchased a BIC pen. There are another 99,999,999,999 out there. What's your point?

July 02, 2009 11:12 AM
Rainmaker
202,646
Nick Bastian
Real Estate Agent - Tempe
Realty Executives

So, a fully executed contract does not mean that all signatures have been obtained? It means that all parties have signed, in front of a credible witness?

Maybe we should read the following few lines, as well.

"This Contract and any other documents required by this Contract may be executed by facsimile or other electronic means and in any number of counterparts, which shall be effective upon delivery as provided herein"

I have taken many contract classes concerning our residential resale purchase contract and have had discussions with some of the people that wrote the language. It is my belief that they thought through the process and that the intent is clearly to acknowledge these electronic signatures. Proving anything in a court of law ( maybe our mediation process would be more clear as they would *probably* be familiar with the *intent* of the situation) can be difficult and any number of things can be argued effectively. I might even argue that a complete and legible file is far more effective than an incomplete or non-legible file.

While this post was written in April of 08, in June of 08 I read another very informative post mentioning the Electronic Signatures in Global and National Commerce Act and the Arizona Electronic Transactions Act which helped to further my confidence in the use of electronic signatures in my business. I have researched the company I use for electronic signatures and feel that I am, in no way, jeopardizing my career or the best interest of my clients.

I appreciate the fact that many people have differences of opinion. It makes for some great discussion. :-)

July 02, 2009 12:07 PM
Anonymous #30
Anonymous
Anonymous

TG,

I have no doubt whatsoever that DocuSign's relative risk is far, far less than faxed documents which I personally regard as nearly worthless.  Signatures are often not even legible in faxed copies and a court would regard such as specious if that is all one had to hang his hat on.  E-SIGN compliance is also not in question in my mind since there is nothing different from what DocuSign does from what Thawte does really.  Both are signing authorities that either certify or warrant that a party has produced acceptable information and that either an unique digital certificate or a block of unique digital data has been assigned to that party and that party alone.

What I am simply saying that in the way it is used and the way it has been discussed in this forum as having been used, it does not identify the person sitting at the computer.  How many times have people read or heard of persons in a trial claim innocence based on the theory that someone had stolen their identity or that someone adopted a guise designed to impersonate them?  The same claim can be made with respect to digital signatures.  If a particularly diligent and aggressive attorney for a claimant were to pursue the chain of custody of documents using the toolbox of attorney tools under today's post-2006 Federal Rules for Civil Procedures, it is entirely possible that he could establish satisfactorily to a court that a signature is not valid no matter how much the data after the event of signing is preserved and guarded.  If the wrong person signed the document, that's pretty much all there is to say about it.  With the three out-of-the-box methods of additional identity authentication offered (email authentication, a one-time password, or an ID Check), none of them still prove that it is John Smith sitting at the computer.  If John Smith's machine is left on and someone else opens his e-mail client, the e-mail authentication would be easily bypassed.  If the one time password has been written on a piece of paper and the interloper finds it, the security is subverted.  If John Smith's computer is left on and he left his wallet on the desk, the ID check can be subverted. 

The real test of identity today when it comes down to life and death issues is a DNA test.  Even then such evidence is always expressed as a percentage of probability of a match.  E-mail, passwords, and ID don't come close to the level of positive identification that DNA tests provide, and a legitimate question to ask is if such should be required for ordinary commerce.  Most like Jay & Francy who have responded above, provide responses that imply that this is all much ado about nothing.  Others would say, "Hmmm...maybe this needs some looking at."

The fact is that an attorney in a courtroom, who is motivated by the large fees he will collect for his billable hours, will make sure there are plenty of billable hours to show.  The way he does this is to subpoena records, both paper and electronic.  He then traces down every conceivable break in the chain of custody and presses for the court to disallow admission of evidence that could be unfavorable for his client's case.  That is a fact. 

It is the behavior of officers of the court (attorneys) that should be a primary consideration in testing the adequacy of any business process because that is where those processes legality and protection will be tested if the parties disagree, and surely if there is an area of commercial activity where there is more than an occasional disagreement, it is the area of real estate.

Unfortunately, I will have to bow out of this discussion now since I actually have a business to run.  If some wish to continue the discussion offline with me they can look up my profile and communicate with me directly.

July 02, 2009 02:12 PM
Rainmaker
250,621
Jay Thompson
Zillow

"Most like Jay & Francy who have responded above, provide responses that imply that this is all much ado about nothing"

For the record, it's Jay making these comments. Francy has nothing to do with it.

I'm not sure where I implied this was much ado about nothing.

I'm simply stating that the State of Arizona (the only state I really care about) has said that electronic signatures on real estate contracts are perfectly legal. I've also said the concern Robert is speaking about -- chiefly that you don't know who is sitting at the keyboard -- is also true of the way the vast majority of real estate contracts are completed today.

Perhaps I'm putting too much trust in the flock of attorneys that write and review our contracts and procedures. Perhaps I'm putting too much faith in humankind. But personally, I don't lose sleep over my use of electronic procedures, nor do I dwell on the potential problems that could occur in court from them. Real estate is rife with oportunity for people to sue. Of course that is a concern. I happen to feel the validity of electronic signatures is way down the list of potential pitfalls. Of course someone who sells electronic verifcation systems will feel differently.

I actually have a business to run too. Discussing things such as this are part of running that business. Given that your business is selling electronic verification systems Robert, I'd think you'd welcome these discussions as well.

July 02, 2009 04:23 PM
Anonymous
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