Compliant Electronic Real Estate Transactions – It’s All About Collaboration
If you bought or sold a home within the past year you certainly understand the challenges around the implementation, processing and closing this high-valued transaction. You also might have concluded that in this day and age ‘there must be a better way’? You may not have realized that there was and is a ‘better way’ - which would have eliminated most, if not all, the stress and friction you just experienced with this paper-intensive process.
Less than 5% of the today’s real estate agents (most responsible for getting the deal started) have taken their business to the next level and have incorporated electronic signatures into their workflow, contracts and agreements. An E-signature is the ‘glue’ that connects all parties and documents over the Internet-100% paperless with secure real-time execution. There is no longer the need to drive all around town to chase down signatures or to find a fax machine (95% of consumers have Internet access and only 5% have fax machines at home) or to pay for expensive overnight deliveries. As a long time real estate veteran I can recall those calls late on a Wed aftrenoon that all parties must meet at 10:30am Friday in some office typically 20 miles away from no where in order to close the deal (on the East Coast still deploys face-to-face sit down closings-which in reality become a long winded 11th hour art of negotiation session). Buyers, Sellers, their agents and all the ‘suits’ –personal attorneys plus the banks attorneys and title attorneys had to re-arrange all their schedules – crazy. Talk about stress – last minute day off at work for principals, running around finding last minute baby sitters, running to banks to get cashier’s checks, etc..
Imagine if all you had to do was open your email, type in your name on contracts, click consent and submit? I think we would all agree that this would definitely be the ‘better way’. Although the E-Sign Act was signed into law by President Clinton back in June, 2000 it has taken many years of collaboration and ‘buy-in’ for all the Industry participants to get on board with a complete electronic and paperless transaction: Agents, Title, Escrow/Settlement/Closing agents, County Recorders/Registrars, Lenders, Attorney Generals, District Attorneys, Secondary Investors, MERS e-Registry, Desktop Title Lien Search and Secretaries of State. The sense of those of us that were trying to solve ‘the pain’ in this high-liability transaction is that we needed to sit down with all these folks and get them to agree to accept these legally binding documents. As you can imagine, this was not an easy chore and has taken twice as much time than we expected.
As the Industry continues to ramp adoption it is important to understand most vendors were started by ‘technologists’ in search of an opportunity while others, solving the pain, compliance issues, garnering Industry wide certification, brought to the table extensive domain expertise, know-how and collaboration skills to have all parties to raise their hand - “I’m In”. Welcome to the future – the all digital real estate transaction.
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