The real estate industry is notorious for the vast number of documents each transaction produces. We’ve all seen the shocked looks of clients faced with a stack of disclosures, addendums, and agreements to sign. At one time, this meant bringing everyone into one room together or waiting around while everyone involved in the transaction stopped by the office and signed one by one. With the advent of real estate electronic signatures, however, real estate paperwork is easier and better organized than ever before.
What is a real estate electronic signature?
An electronic signature is an online tool designed to help real estate professionals offer remote document preparation, approval, and completion to clients and stakeholders in a real estate transaction. From initial representation agreements to leasing agreements to assorted supporting documents, an electronic signature can speed up and simplify many aspects of the real estate transaction process.
Why are electronic signatures uniquely useful for real estate transactions?
Real estate transactions require many different signatory elements including full signatures, initials, dates, and fillable text elements. Because electronic signatures can be customized to accommodate these various items, they are particularly useful for real estate transactions.
In addition, of course, there are the requirements of real estate services. In many cases, a rental applicant may be relocating from another city, state, or even country. A property owner may live far away from the property he or she owns. The ability to send documents electronically for instant signing is a fast and convenient way to provide better service to each party in the real estate transaction.
Finally, there are a variety of legal requirements for real estate document storage, disposal, and retention. Applications for rejected renters must be properly disposed of. Applications for accepted tenants must be kept on file for years. The rental agent or property manager is legally liable for the secure and proper storage of all of these documents as well as rental agreements, addenda, and representation agreements. The use of digital document storage, facilitated by electronic signing, makes this part of the agent’s task much easier and safer.
Are electronic signatures as good as handwritten signatures?
In fact, electronic signatures are, in many ways, better than handwritten signatures. Because they are not prone to fading or destruction like a physical document, electronic signatures are more reliable and longer-lasting. In addition, they offer protection against alterations along with the capacity to void the signature if needed in the event of a clarification or change to the document.
As to the legality of electronic signatures, this has been covered by federal and state law for decades, beginning with the ESIGN (Electronic Signatures in Global and National Commerce Act) Law in 2000. The ESIGN law was supported by the National Association of Realtors (NAR) for its ability to increase efficiency and reduce paperwork.
Best practices for real estate electronic signatures
Real estate has been an early adopter of digital technology for transaction management. Because of this, some of your clients and rental applicants may not be entirely familiar with the process of using electronic signatures. Communication is key to ensuring that everyone understands how e-signatures work and the benefits they offer.
Provide information about e-signatures.
As part of your representation agreement package or along with preliminary information that you provide to rental applicants, it is a great idea to include some basic information about e-signatures. Here you can answer frequently asked questions, provide screenshots of the RentSpree e-signature platform in use, and cover general information about laws and regulations governing an electronic signature.
Obtain consent from your clients before using electronic signatures.
As with any other type of technology or process, it’s important to use e-signatures properly and for the benefit of your client. That means ensuring that everyone involved in the transaction is properly informed and consents to their use. Many standard real estate documents include a section pertaining to the use of e-signatures which provides needed information and a checkbox for approval.
Explain documents thoroughly before signing.
The ability to obtain electronic signatures on the documents you use in a rental transaction is not intended to minimize client service and interaction. Don’t just shoot off a document to your property owner or rental applicant without offering the opportunity for them to discuss the ins and outs of the content.
If possible, go over the forms you need via Zoom call or Google Meet. Alternatively, you may want to create a video walkthrough to accompany the standard documents you use in your transactions. This will allow you to provide thorough information that clients, applicants, and tenants can refer to again and again as needed.
One of the primary changes that has occurred for many real estate professionals in the age of COVID-19 has been an increased emphasis on virtual options for transaction management. This is a change that is good for everyone involved since it provides easier access and a more convenient process for the rental agent, property owner, applicants, and tenants. Real estate e-signatures are an integral part of making this change manageable for everyone.
If you’re ready to begin using real estate e-signatures in your rental transactions, RentSpree can help. We offer easy and fully customizable electronic signatures built right into the RentSpree platform. This option is completely integrated with the rest of our services and provides the convenience and user-friendliness you need. RentSpree is dedicated to providing a robust technology platform designed for the way you work and serve your clients.