Real Estate Round-Up: Read first, then sign

It’s a new year, and I want to start out with a column about a tool most real estate practitioners use on a very regular basis, to help streamline the process of selling or buying property: DocuSign.

DocuSign was founded in 2003 and began selling the product in 2005 when zipForm, now zipLogix, integrated DocuSign into its virtual real estate forms.

In 2010, DocuSign added support for iPhone, iPad and phone-based user authentication. By 2012, 90% of Fortune 500 companies signed up to utilize DocuSign. In 2013, DocuSign and Equifax partnered to simplify the electronic delivery of the Requests for Transcript of Tax Return Form 4506-T to the United States Internal Revenue Service.

DocuSign has become a mainstay in the real estate transaction. It has made the process of executing documents between buyer and seller, expedient and seamless. It provides a complete record of every document that is completed to all parties who signed the document and lives in the “cloud” for historic preservation and includes certificates of authentication to provide validity to the signors.

Knowing this information, why is it my first topic of 2020? The ease of everything has created a passive participation by many signors. Let me explain. I became a licensed Realtor in 1997. Way back then, Realtors had to meet face to face with most of their clients.

There was the occasional buyer or seller who was out of the area, which meant that “faxing” was the means of formalizing contracts. Mostly, however, Realtors met with their clients and met with the Realtor who represented the other party to exchange documents so that the other party could evaluate the document and respond to the document. All done in “wet signatures.” It was cumbersome but personal. It was time consuming but deliberate. Relationships were built, communication was clear, questions were answered and transactions were completed.

Back to my position that DocuSign has created a wave of passive signors. When we meet with sellers, we make our presentation when we interview for the listing. If we are fortunate enough to secure the listing at that meeting, we present the listing documents, face to face, making sure to explain in detail the contract, answering any questions and ultimately executing the document.

If, however, the listing occurs after the first meeting, it can be executed via DocuSign. Despite the attempt to explain the document via email or to request that the sellers contact us with questions before signing, we truly don’t know what the sellers do when they receive the document. We don’t know if they review the document at all.

A similar experience exists to a greater degree with buyers. Many buyers prepare for purchasing a property by getting pre-qualified and accessing proof of funds from their financial institutions. Buyers start the process of viewing property until they find the right home.

After days or weeks of viewing homes, often buyers feel the need to “go home to digest everything and make a decision.” That need sounds great. I would want to digest and discuss everything with my husband before I made a big financial decision like purchasing a home. But then, DocuSign becomes the tool to formalize the purchase agreement. Once again, the face to face experience is eliminated for efficiency.

Don’t get me wrong. I love DocuSign. It makes everything easier for all parties involved. But it must never achieve that goal without prudent questions and informed answers so that all parties truly understand what they are signing.

The ease of the process reminds me of what it is like when you sit in front of the finance guy at an auto dealership. They put pages of documents in front of buyers to sign. They explain, minimally, what the documents are stating, the buyer signs and walks out with a car. It’s a little different because other than price and terms, there’s not a lot to negotiate over when leasing or purchasing a car. With a home, there are many additional items that can be negotiated.

Here’s my concern. Sellers and buyers generally trust their Realtor, so it is based on this trust that they too often just click through DocuSign, without reading the documents at all.

Sellers and buyers should trust their Realtor; we have a fiduciary to our clients. Trust is listed as the No.1 characteristic client expect from their Realtor. The thing is, what’s important to me, could be entirely different from what is important to my client.

As homeowners plan for 2020 and the potential selling or buying of property, they should continue to trust their Realtor, but they should also remember to read all documents before signing them. The power and responsibility are ultimately belong to the buyers and sellers. They shouldn’t take it lightly.

Happy 2020! We are here to help you and your friends and family with their real estate needs.

Kim Murphy can be reached at [email protected] or (760) 415-9292 or at 130 N Main Avenue, in Fallbrook. Her broker license is #01229921, and she is on the board of directors for the California Association of Realtors.