Driven by the shift to mobile and new tools such as the iPad, 2011 promises to be the year that the real estate business makes a major shift towards going completely paperless. The issue is how today’s savvy digital agent can simplify the transition when the majority of agents continue to cling to their stacks of paper files.
The move from using paper to becoming paperless will give you a huge competitive edge while also saving you tremendous amounts of time and money. On the other hand, it will also cause you tremendous frustration as you are forced to deal with agents, lenders, and title and mortgage professionals who refuse to accommodate a better way of doing business.
For example, one agent cut his workload by 80 percent after going paperless. In California, there were 92 items he needed to complete from the time he took a listing until closing. Each of those items began with filling out the client’s name and contact information. Once the property was under contract, he also had to enter the buyer’s information as well.
By going paperless, he enters the name once in his system and the computer populates all the forms with the appropriate contact information. Also, he no longer has to track 92 sets of documents.
Another agent shared how going paperless helped her in a multiple-offer situation. She was competing against three other agents. Once the seller issued the counteroffer, she sent it to her buyer who was flying across the country. Her buyer signed the counteroffer using DocuSign, and she finalized the deal in less than five minutes. The other two agents barely had time to call their clients to arrange a meeting.
The biggest challenge in going paperless: digital dinosaurs
The challenge for those who go paperless is that the majority of transactions are co-brokered. Because most companies still operate using paper, the probability is high that the digital agent will be stuck with a paper offer. The biggest challenge occurs when the cooperating agent refuses to cooperate with the digital approach.
For example, I recently spoke with an agent who was with an office that was completely paperless. Her case illustrates the difficulty digital agents face when dealing with non-digital agents.
The challenges with the paper-based agent began early in the offer process. The buyer’s agent didn’t understand how to use the digital signature system. When the buyer’s agent received a digital document from the listing agent, she would print it up, drive to the buyer’s house to obtain a signature, and then fax it back.
The challenges grew even more pronounced once the property was placed under contract. The buyer’s agent selected the escrow. Even though all 50 states allow digital signatures, the escrow officer didn’t understand how they worked, and insisted that all documents be faxed to his office or hand-delivered.
This meant that the listing agent, whose office required her to submit everything in a digital format, had the extra burden of scanning all the faxed documents back into her company’s digital system.
What was particularly frustrating for the agent was the lack of willingness on everyone’s part to understand how the digital signature process worked.
"Wet" or digital signatures?
Many escrow, title and mortgage professionals insist on what is known as a "wet" signature. A "wet" signature is one where your clients actually hand-sign the documents in question. In others words, to finalize your purchase agreement, you are expected to drive across town or send documents via express mail to have your clients sign a hard copy of the contracts.
In contrast, when you work with digital signatures, you have multiple options in terms of how you obtain a signature. For example, if you have a tablet computer or an iPad, you can have your clients sign their name on your computer or mobile device. The tablet computers may use a light pen, much like what you use when you pay by credit card in many retail stores.
There are some stylus tools for the iPad, although they are not nearly as easy to use as the PC light pens. There is at least one iPad application that allows you to sign your name on the touch screen with your finger: no pen needed. Unfortunately, the process can be cumbersome.
An entirely different approach is to use a process like the one from DocuSign. Clients are assigned their own unique code, much like using your credit card online. You receive a "digital key" that you use to sign the documents. The beauty of this approach is that it can work with almost any type of computer.
It also completely documents the exact time and date the document was signed. The documents and signatures are stored in the cloud where all parties can access them easily.
Is it worth it to go digital now?
Although there are considerable hassles involved in dealing with agents and ancillary services that are not digital, the time and efficiency savings for digital agents are huge.
If you haven’t made the shift to being digital, using digital signatures is a great place to begin. Once you have made that transition, consider going completely digital using cloud-based technology. It may save you time compared to your current paper-based system.