Our job is to protect the consumer!


Last week we had a Summit for the Distinguished Real Estate Instructors in St. Louis, Mo. In attendance were the most outstanding real estate educators across the county; from Florida to Canada, Maine to California and all states between. One of the topics discussed was judicial rulings and legal discussions concerning the legalities surrounding the use of e-signature programs. It appears that this is a much larger issue than I initially thought.

Since my mission is to educate, train and protect real estate agents while at the same time protecting the consumer’s best interest, I feel it necessary to make everyone aware that e-signatures are being debated nationally in legal circles. I neither advocate for nor against the use of any e-signature program. I am confident that the programs themselves are very valuable and useful. I will simply bring it to the attention of all concerned so you may investigate for yourself what is best for you.

To be totally fair about the use of such programs I think we should evaluate the advantages and disadvantages. With the invent and wide use of fax machines and copiers with scanning abilities, which made the presentation of documents faster, with much less effort. This new technology made our jobs easier but it also has fault. I can’t explain how or why but documents are reduced in size, which distorts a document making it illegible. I think it has something to do with everyone having different types of equipment but the fact remains that some documents are so badly blurred they can’t be read by anyone.

Someone had an innovative idea to develop a program whereby documents can be viewed and changed by a number of people without having to transmit the document. Thus the birth of various programs such as e-Signature, DocuSign, EchoSign, Dotloop and I’m sure there are others I don’t know about. By setting certain parameters, the author of the document can limit who can access the document and what changes are allowed to be made within the document. From the onset it appears to be the greatest thing since sliced bread. Its use is quick, easy and eliminates many problems; especially with getting contractual agreements presented and signed.

The developer of such programs confronts all issues for making the program work without glitches and they generalize the program so it will be adaptable to many different type businesses in various industries. Many businesses quickly incorporated their use into their personal day-to-day business activities. Real estate agencies across the country began using the programs and fell in love with them. Consumers are quickly adapting to their use as well.

So far we have reviewed the advantages of e-signature programs but are there disadvantages we should consider? Some attorney’s think so and some judges have ruled against their use. Some e-signatures (Internet signatures) are acceptable and some are questionable. For example; If you and I were negotiating the sale of something by sending emails back and forth, when we sign the email, it is considered an acceptable e-signature. These signatures have been upheld in court. Where the unacceptable e-signature comes into questions is with the signing of a contract. If I were acting as your real estate agent, selling your house and I delivered an offer via one of the e-signature programs, the legal concerns seem to surround if you were thoroughly explained the contents of the offer or you simply thought you understood what was being offered and you signed the contract making it a legal, enforceable agreement in a court of law. FYI, real estate laws require a Realtor® to disclose everything they know about a property to someone they have a fiduciary relationship with.

One might think this is making a big deal out of nothing but I was taught that an “ounce of cure is worth a pound of prevention.” I can clearly see both advantages and disadvantages but the thing we must take into consideration is what if a major issue presents itself that ends up in court. What will the judge base his/her decision on? We will be held accountable for our own actions and we won’t be excused because someone told us it’s permissible to use an e-signature program.

Personally I see a whole lot of good that these programs can provide but I can also see why the legal profession is questioning their use with real estate sale contracts. At some point there will be a Supreme Court case that will determine the future use of e-signatures in sales contracts. We have to ask ourselves if we want to be a part of the case that everyone refers too. I suggest you do your own research and decide what is in your best interest.

Should you have specific questions concerning various issues, please let me know and I’ll research the answer for you. I also want to encourage you to subscribe to our “News & Updates” weekly report so you can stay abreast of issues that might affect you when buying or selling real estate. If you haven’t visited my website, please go to www.AlabamaRealEstateInstitute.com and view previous articles.