Many businesses have been slow to accept digital signatures for legal documents but that may no longer be an option.
Most parts of the home buying process have benefited from the use of technology. Even before the pandemic, people were able to search for homes online. When the lockdowns prevented real estate brokers from holding open houses, they were able to use technology to create virtual open houses and walkthroughs. Improving this part of the home buying process enabled real estate brokerages to support buyers and sellers, adhere to health and safety regulations, and keep all parties safe.
However, some parts of the process – such as closing the deal – are still stuck in the past.
An unwillingness to accept digital signatures in the real estate sector
Digital signatures – also referred to as electronic signatures or e-signatures – on legal documents are widely accepted in many industries, including lawyers. However, some real estate agents and their clients still require wet ink on purchase agreements, contracts, and other documents. It’s all tied to the historically cumbersome process of ensuring every document was physically passed to, viewed, and signed by all stakeholders.
Ironically, lawyers have long accepted faxed and emailed copies of signed contracts. These signatures are copies of the original and essentially digital. Real estate agents and lawyers made the move to fax and email over physical signatures to streamline the closing process. Making the move to accept digitally signed contracts is just the next step in making the closing process more efficient for buyers, sellers, real estate agents, and lawyers.
Making the switch from physical to digital storage for real estate brokerages
Accepting digitally signed contracts and other real estate documents creates a more efficient closing process. However, digitally signed documents must also be stored, which can create storage issues.
Real estate brokerages have always had to store and manage thousands of documents that contain clients’ personal information. Digital contracts and other documents that contain sensitive data (including digital signatures) must also be properly stored, secured, and backed up. Real estate brokerages can use either on-premises or cloud hosting to store documents and must also set up an electronic document tracking and management system. Digital storage will eventually replace the storage of physical files, which will free up office space and protect paper files from being lost, stolen, or damaged.
Protection of personal identifiable information in real estate
With electronic contracts and other documents being shared between multiple parties, real estate brokerages will have to take steps to protect clients’ privacy and data. This involves protecting personal identifiable information (PII), which is legally required under federal regulations.
Real estate brokerages must invest in a framework and procedures to prevent the loss, theft, or misuse of clients’ PII. It also serves to protect the company’s reputation and interests against legal and financial consequences.
Seeking out greater efficiencies for real estate brokerage firms
Accepting digital signatures on contracts and other documents creates efficiencies across the business. Since files can be signed and sent electronically, transactions and approvals take less time. Removing dependence on paper documents and other manual processes means fewer redundancies and errors, as well as easier searching of documents. Since electronic documents are managed and organized digitally, real estate brokerages can also ensure that they are regulatory compliant.
Domain 6 Inc. can help real estate brokerages identify efficiencies across the business and put together a solution framework that will allow you to transform while minimizing the impact on the running business.