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Electronic Signatures. Promoting Understanding? Or, JUMPING THE SHARK?

By
Real Estate Agent with Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate 303829;0225082372

The Value Of Electronic Signatures.  Good For The Consumer? Or Easy For The Agent??

Say what you will.  The adoption of electronic signatures by the real estate industry has also served to permit consumers to go forward with transactions, whether or NOT they understand what they're signing.

Nothing beats looking them in the eye.  If a buyer is local, my practice is still to sit with them and review and explain every single paragraph.  I can almost always recognize when that face to face review helps them understand what they're signing.  Electronic signatures do nothing to further the consumer's understanding of what they're signing. 

So the agent sending the docs understands the content.  So what?  Are we seeking an easy signature or are we seeking an informed consumer

Can it be that the ubiquitous use of electronic signatures as an example of "jumping the shark".

Is it possible that many consumers simply shake their head up and down to appear knowledgeable?  Or, do they truly understand what they're signing.  Sadly, many consumers are like bobbing head dolls.

"E-MAIL IT TO ME!"  I don't fault the agents who have moved forward in the electronic age.  They're just following industry practice.  I see them regularly.  We have a written a Contract of Sale for a qualified buyer and want to present it to the listing agent.  As surely as the sun will come up tomorrow, the first words out of their mouth will be:  "E-mail it to me".

If the listing agent is located within a couple of hours, I insist that I want to review the offer with them in person.  I want to present the written offer.  However, I also want to present the home buyer.  THAT is not a paragraph in the written contract.  Of course, we have a lender's letter, that's fundamental.  Fact is, I want to know that the listing agent understands the buyer's qualifications.

No doubt I won't change any agent's practices here.  However, I suspect that, if more attention is given to the initial contract review process, fewer problems will follow. 

Courtesy, Lenn Harley, Broker, Homefinders.com, 800-711-7988, serving home buyers in Loudoun County, VA.

                    _____________________________________________________________________

 

                            

                                                     Honey, we got the contract, but it's really long.

                                                               Is it O.K. to initial those boxes? 

                                             Sure Honey.  They wouldn't send anything that wasn't O.K.

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Comments (11)

Debbie Gartner
The Flooring Girl - White Plains, NY
The Flooring Girl & Blog Stylist -Dynamo Marketers

Lenn - excellent points.  I see the electronic signature as the formality AFTER someone has agreed.  We do our best to explain the process and the watchouts and I send the regular proposal first.  AFTER someone has read that and asked all their questions, then we send the document on docusign.

Nov 02, 2013 09:08 PM
Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

Debbie.  Good practice.  The goal is to get signatures by electronic or written with an informed client.

Nov 02, 2013 09:23 PM
Thom Abbott
MyMidtownMojo.com |770.713.1505 | Intown Atlanta GA Condo Living - Atlanta, GA
Midtown Atlanta GA Condos For Sale

Lenn...with my first meeting with a Buyer, I give them a packet of information. I will admit, we don't go through it paragraph by paragraph, but I do give them copies of contracts, disclosures, etc. and tell them to review them as these are the documents we will be using when we make our offer. 

I'd like to be "high tech" and email them, but it's true...do they really sit and read them? Do they even read them when I give them to them in person? I think I might kick it up a notch, and highlight some of the paragraphs for them. They are ALL important, but it would make them notice more. 

Informed consumer. Perhaps we should spend more time informing the consumer, and all would have a better understanding of how hard we work and what we do to make the process of making their single largest financial investment much easier. 

Now you got me thinking over my Sunday morning coffee! 

Nov 02, 2013 10:23 PM
Hella Mitschke Rothwell
(831) 626-4000 - Honolulu, HI
Hawaii & California Real Estate Broker

Lenn: Like Debbie, #1, I always send a draft of the document first (that is, if we can't sit down together which in today's world happens a lot) then follow up with DocuSign. This way they can go over the content with me (whether we sit in the same room or not) without feeling they need to push that next "click" button.

Nov 02, 2013 10:23 PM
Jay Markanich
Jay Markanich Real Estate Inspections, LLC - Bristow, VA
Home Inspector - servicing all Northern Virginia

Lenn - wasn't one of the problems with the "bubble" the so-called "predatory" lenders having people sign stuff they didn't understand?     ;>)

Nov 02, 2013 10:54 PM
Joe Petrowsky
Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709 - Manchester, CT
Your Mortgage Consultant for Life

I do mortgages in 8 states. When I email a mortgage package to them, I will go over each and every page with them before I will have them sign anything.

Nov 02, 2013 11:30 PM
Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

Thom.  I also give new buyer/clients a forms package for them to review.  However, it's when time for us to submit a written offer, that I sit with them, even if it's in my vehicle, and review everything they sign paragraph by paragraph.

Hella.  Fact is, as you know, the signing phase shouldn't be rushed.

Jay.  Not really.  Folks were signing proper discuments by lenders who offered sub-prime loan programs which required little documentation. 

The lenders weren't "predatory".  They were following HUD, Fannie, Investor, etc. guidelines.  That said, with "no proof of income" required, many got loans on their signature alone.  The problems, I believe, were with the permissive guidelines designed by the regulatory entities.

Now the government has over-reacted and established guidelines that exclude many worthwhile borrowers.

Joe.  THAT is a good practice.

Nov 03, 2013 12:42 AM
Jay Markanich
Jay Markanich Real Estate Inspections, LLC - Bristow, VA
Home Inspector - servicing all Northern Virginia

I know.  I was being facetious, or sarcastic, or cynical.  Pick your adjective.  And the gubment response was predictable.

Nov 03, 2013 01:36 AM
William Johnson
Retired - La Jolla, CA
Retired
Hi Lenn, You raise some outstanding points and it should give all of who use e-signatures pause to be sure we are doing our job, clearly representing the principle's best interest. That would include that we verify that they clearly understand what they are signing. This post should be Featured as it may be one of the most important practice issues I have read about in a very long time. Suggested!
Nov 03, 2013 02:23 AM
Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

William.  Thank you so much.  I realize that advances in technology are important, but the convenience for the agent can't determine who we manage our contracts. 

I learned that when CONSENT is given, it is only enforceable if it's INFORMED CONSENT.

 

Nov 03, 2013 03:06 AM
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Lenn, I a agree with your concerns, but Electronic Signatures does not mean that they will eliminate the  LO  meeting face to face with the Borrower.  I would still insist on meeting with each of my Borrowers when ever possible just the same way I do now.  I want to explain each and every page.  Electronic Signatures would simply eliminate the need for them to sign and initial every single page, and on the few occasions they can not meet with me it would speed the return of the documents. 

Even on the few occasions I cannot meet with a Borrower I explain every document to them over the phone and make sure they are signing in the right place.  Electronic Signatures would simply simplify the signing process.  If a LO does not take the time to explain each document when using Electronic Signatures, then I am sure they do not explain each document now.  The good LO's will continue to provide their Borrowers with the same service they give now, and the questionable LO's, well lets just say they will continue to do the "just sign here" and not explain anything with or without Electronic Signatures.

Nov 03, 2013 11:16 AM