When a prospective buyer emerged for his client’s condo in northern Kentucky, the first problem real estate agent Mike Dunn faced was tracking him down in the Australian Outback.
The next problem: How to get the deal done?
Timing was critical — his client was also buying another unit in the same complex, so his client’s purchase was contingent on the sale of his existing unit.
The seller of the unit his client wanted to purchase happened to be in rural Michigan — not quite as remote as the Outback, but definitely not local.
So Dunn, a senior sales executive for Huff Realty markets, went paperless.
Dunn, 53, was among a group of agents at his real estate firm who had received training on an online transaction platform built by Cincinnati-based DotLoop.
While he considers himself more tech-savvy than some agents, he said he is by no means a tech expert.
DotLoop provides an online platform for preparing, sharing and signing documents with various parties in a real estate transaction.
"This was extremely time-sensitive. Everything had to be done within a day or two," Dunn said.
It was after 11 p.m. on a Saturday when he e-mailed the documents for his client in Australia to sign electronically, and he called a DotLoop representative that same night to verify that he had handled the documents properly.
Austin Allison, who co-founded DotLoop in 2008 and serves as the company’s president and CEO, said his previous job as a real estate agent inspired him to create the company.
"Everything I was doing was in multiple systems, multiple places," Allison said, and DotLoop is intended to serve as a "one-stop shop online for real estate agents to be able to transact their business.
"What we’re seeing in the industry is really a drive for convenience and simplicity," Allison said. "I call it the perfect storm."
Early entrants to the paperless realm, like DocuSign, helped raise public awareness about electronic signatures, and the real estate industry has been demanding greater efficiency, he said, with more brokers seeking virtual offices and operations.
At the same time, he said, "Buyers and sellers in the marketplace … (are) demanding convenience. Time kills deals in these markets. Everybody in the world today is busy. The last thing anybody wants to do is take additional time."
He said consumers’ "entire mindset has changed," too, as they have gained a comfort level with online processes. Homebuyers these days, he said, "don’t need a real estate agent to knock on (the) door and deliver a contract."
In addition to its own e-signature technology, DotLoop allows brokers to scan and enter forms into the system that can be populated with prompts with where to input information unique to each transaction.
"Brokers put forms in our system and use them. They can use their own private forms — put any form into the system that they want," Allison said.
DotLoop charges a fee for unlimited use of its platform, and the cost — which Allison said can range around $10 per agent per month — is based on the number of agents at the brokerage.
There are a total of about 5,000 agents who have access to the system now, Allison said, in markets ranging from Texas to New York, and the goal is for the system to be accessible to agents with little or no training.
Dunn said his client e-signed the documents while in the Outback and the sale was a success. The paperless system "basically … just kept everything moving," he said.
Dunn said he doesn’t use it for every transaction, though it does make sense when parties to the transaction are in remote locations.
It’s going to take some time for all agents to hop on the paperless bandwagon, Dunn said, due to the broad range in age and expertise, and part-time and full-time status, among licensees.
A hiccup with paperless adoption is in "trying to explain (the process) to another agent who doesn’t understand it at all," he said.
Allison said, "The biggest hurdle (to paperless tech) … is agent resistance to change. This is human nature — not just real estate agents."
When one agent prefers to transact by paper and the other electronically, that can create more work for both parties, he said.
Brokers’ bottom line should help to bridge that technology gap, he added.
Because of economic conditions, he said, some "real estate brokers are losing money and identifying any way to either acquire more market share or cut costs. So the paperless movement allows them to cut costs. (They) can spend more time recruiting and less time inputting data."
Dunn said he expects to see a growing base of support for paperless transactions.
"I think at some point … (agents are going to) use this for all local sales," he said.
And even now, "If you’ve got one or two parties out of town, it really makes sense."
Without an entirely digital process, the image quality of documents can degrade after a few faxes and scans, he noted, and he has participated in transactions where the lender did not accept contracts because they were illegible.
Since the deal with his buyer in the Outback, Dunn said he has participated in two paperless closings. "In both cases I had the buyer and lender request that it be done paperless," he said, and there was a learning curve for the local title company representatives.
"The technology is moving away from just agents, all the way (to) closing," he said.