Electronic Signatures for Real Estate Transactions

Electronic Signatures for Real Estate Transactions

 January 25, 2017

Electronic signatures have come a long way since 2000 when the E-SIGN Act was signed into federal law. For real estate professionals who began selling and listing real estate in the past few years, at least since 2012 or so, electronic signatures probably seem pretty normal. But for many buyers and sellers, and even some agents, it’s still an unfamiliar technology met with skepticism and uncertainty. Whether you use e-signatures as part of your normal routine or you’re considering it for your real estate business, you should know how it works and which companies to consider for your e-signature needs.

The Pros and Cons of E-Signatures

E-signatures or electronic signatures allow your client or customer to sign a real estate listing agreement, offer, or contract on their computer or phone. No pen and paper needed. You don’t have to fax or even scan the documents. Years ago, even that wasn’t an option. Agents were driving agreements around town or sending them out in the mail. E-signatures changed everything.

With a click of a few buttons or taps on your touchscreen, you can bundle the necessary documents into an email. The other person accesses them on their device, signs and initials, and sends them back. Depending on the e-sign system you use, they may even be guided step-by-step through signing so nothing missed. In less than a day, you can write up the offer, send it off, and get it back signed.

E-signatures offer plenty of benefits:

  • Quicker deals
  • Better efficiency
  • Lower costs

That’s assuming everything works well.

E-signatures aren’t always a perfect solution. The person on the receiving end may not have internet access at the moment. They may not act quickly to look over the documents or get it back to you. And that’s just the human side of things. The real potential problems with e-signatures depend on what system you use.

  • Will the documents be secure?
  • Is there a verification method to make sure this is a legitimate and enforceable signature?
  • Is it digitally sealed so it can’t be tampered with?

If you don’t choose the right provider, you may leave yourself open to serious problems.

When and How You Can Use Electronic Signatures

On one hand, since so much of our life is spent in the digital space, it makes sense that electronic signatures would be an option in a real estate transaction. If we can order a pizza, buy a car, or watch an entire series of TV shows online, certainly we can sign a document electronically. On the other hand, you might wonder how legal of this is.

The answer is very.

The Electronic Signatures of Global and National Commerce (E-SIGN) Act of 2000 allows electronic signatures on all types of documents and contracts related to commerce, including real estate transactions. It also supersedes any limitations the states might try to put on electronic signatures. States have been encouraged over the years to adopt the Uniform Electronic Transactions Act (UETA) which makes e-signatures enforceable statewide like the E-SIGN Act does nationally.

E-signatures didn’t exactly take off like a rocket in 2000. The Federal Housing Administration (FHA) didn’t allow electronic signatures on real estate contracts until 2010. The good news is that now they do and, it’s become much more common. It’s important that your contracts and other forms include language that references the parties’ consent to the use of e-signatures so there’s no question about whether the signature is enforceable or not.

Who Provides Electronic Signatures?

There are a myriad of companies that offer e-signature services. A few things to look for in any service is the method of delivery, the security of the documents, their verification methods, and how they keep records in case there’s ever a question.


HelloSign allows you to upload a document from your computer, use a template they provide, or use a document in your cloud-sharing service like DropBox or Google Drive. You indicate what exactly needs to be signed and can track whether the document has been viewed or signed. HelloSign uses SSL encryption as well as physical security with professional security staff, video surveillance, state-of-the-art technical surveillance, and other means to keep data secure. They also offer an audit trail that can verify and authenticate signatures.


DocuSign is one of the more recognized e-signature companies in real estate thanks to its partnership with the National Association of Realtors (NAR). As part of the NAR member benefits, it’s available at a reduced cost to NAR members. You upload the documents that need signatures, tag where to sign, and send them to your client or customer. DocuSign makes it easy for everyone. They use bank-grade security to send and receive documents and use strong data encryption technology.


Dotloop allows you to make your business completely paperless. They offer the ability to store, edit, and share all of your documents in one place. Dotloop is securely hosted with plenty of back-ups and checks. The information is backed up regularly and kept secure, and they run third party audits frequently to make sure there are no issues not caught by their other security methods.

You can choose a full-service system that allows you to store and edit documents in one place or you can go with one that allows you to upload contracts and agreements as you need to. Whatever method of electronic signature you decide to use, check the security they provide as well as the authentication and verification methods to make sure the signatures are valid and enforceable.

Michaela Mitchell

By Michaela Mitchell

Former Communications Director for a local Realtor Association and a big cheerleader for all things real estate related, Michaela is now a full-time freelance writer specializing in real estate and other business industries. When she's not writing the serious business-y stuff, she's likely to be found writing about the hilarity of being a Mom to two rowdy boys.