Editor’s note: Part 1 of a two-part series.
Jen Bowman had an eager buyer in Chicago, and clients in Georgia and South Carolina. There was one hitch: She was vacationing in Italy.
With only her laptop at hand, she still completed five real estate contracts using a service that secured all the necessary signatures electronically. Since then, the Georgia broker associate has been sold on digital John Hancocks.
"That’s the future of the business. It’s a huge time-saver. There is less paperwork," said Bowman of Keller Williams Realty in Decatur, Ga.
For Bowman, electronic signatures are the sign of the times in the real estate industry. But she is ahead of the curve.
Some experts estimate just 8 to 10 percent of active U.S. real estate professionals are embracing the technology — even though it has been a decade since e-signatures earned the same legal weight as traditional "wet" signatures.
That’s a far cry from the bold predictions that the federal Electronic Signatures in Global and National Commerce Act would revolutionize e-commerce and automate 80 percent of all financial transactions by 2005.
"Sometimes old habits are hard to break. We’re not at the top of the acceptance curve yet," said Mark Lesswing, senior vice president and chief technology officer at the National Association of Realtors.
Among the obstacles: lingering skepticism, a sluggish real estate market and resistance by some financial institutions.
Sandy Vickrey is one of those who prefers pen on paper. "I’m still old-fashioned. Real estate is still one of those businesses that you meet with the clients. The clients don’t like it (e-signatures). They much prefer paper," said Vickrey, owner-broker of Realty World Camelot in the rural Northern California town of Winters.
Advocates, though, remain confident the day will come when everyone signs on the virtual dotted line. The technology is proven safe and secure, reliable and increasingly easy for consumers to use.
"It’s coming," Lesswing said.
It’s not that agents are technophobes. Think fax, scanner, mobile phone, laptop, GPS and Internet property listings. E-signatures could be the final link to the paperless office, said Bob DeSantis, vice president of sales at DocuSign, a Seattle-based e-signature company. "Customers are becoming more and more mobile. Five years from now every Realtor will use DocuSign or some form of electronic signature."
There has been a steady upward trend in recent years. In 2007, for instance, only 1,000 real estate agents were using DocuSign. Today, 45,000 real estate brokers and agents are signed up and the company is adding about 3,000 new customers a month.
DocuSign announced Wednesday that it closed $27 million in its latest round of financing, an investment led by Scale Venture Partners, and tech news site TechCrunch reported that the company has raised a total $56.4 million since its launch.
The National Association of Realtors’ Second Century Ventures LLC venture capital fund took a stake in DocuSign in November 2009, and DocuSign in March announced a "Realtor Edition" service and special discounts for Realtors.
The big selling points to agents for e-signature: the technology saves time and money (businesses spend more than $7 billion a year to overnight documents for signatures) and gives them an advantage in a highly competitive industry.
Listings can get done quicker and deals finished faster. Moreover, e-signatures are environmentally friendly and attractive to the younger, tech-savvy clientele.
Bowman cites a lease extension she handled for a property in Georgia as a prime example of the ease and swiftness of doing business electronically. The tenants called her about extending their lease and she then contacted the owner, who lived in Washington, D.C. Bowman worked out the details, obtained e-signatures from both parties and received the completed contract within 30 minutes.
"I do a lot more in less time," Bowman said. "It’s a competitive edge."
Experts estimate processing a signed paper document, including printing, scanning and faxing, can cost as much as $40. The pricing for e-signature service varies — from free for a limited number of documents per month to a flat monthly fee ranging from $15 to $20 for an individual.
"Real estate contracts can be very complex. It (e-signature) makes the process smoother for both signers," said Eran Aloni, vice president of products at EchoSign in Palo Alto. "It’s very clear. It’s more transparent."
Gilbert Mohtes-Chan is a freelance writer in California.