We try to make a point of keeping this blog as a nice balance between real estate market news and industry developments along with tips for realtors that allow them to be better in what is an extremely competitive career field. As we continue to stress, knowledge and industry-savvy is very much power when it comes to retaining clients and building your personal real estate corporation. Today we’re on that side of things, and hopefully making you more aware of some of things new realtors may be not be aware of after finishing their licensing course.
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Today we’re going to look at what are the best practices when it comes to electronic signatures and exchanges of documents. Something that’s a fairly regular occurrence nowadays, and so it makes sense to be as in-the-know as possible with this stuff.
E-Signatures
When it comes to e-signatures or wet ink signatures, it is best to have someone be witness to the signatures. One of the benefits of e-signatures providers is that they provide the ability to identify the exact time and location for when the signature was placed on the document, doing so with security certificates. However, be aware that not all e-signature software suites provide security certificates when applying a signature to a document.
Further, programs and apps such as PDF Expert are not set up to provide digital security certificates when documents are signed. They are beneficial in the way that they properly flatten and embed signatures into documents, but they’re not as secure as a digital certified software like – among others – DocuSign.
It is important to note that the real estate regulatory bodies in most Provinces have legislation requiring that every service agreement must be in writing and executed in the presence of witnesses. This applies to agency agreements and offers to purchase, and means that any security certificate provided by credible e-signature providers are not recognized as the witness to the e-signature – at least not yet.
This is something you’ll need to determine for the Province you’re living and working in.
Hand Drawn vs. Stamp Signatures
A hand drawn e-signature – or ‘wet’ signature as they’re also referred to – is created when the signer’s handwriting is entered electronically on a touch screen. This is done with either your finger or a stylus pen. Each signature will be different, and they look very much like what your actual ‘real’ ink signature would.
The stamp e-signature is very common these days. You pick your signature and an initial style from a list of fonts and then place them on pre-defined areas of the document by dragging and dropping with your mouse or cursor control pad on a notebook. The click is then digitally recorded with a security certificate.
Mandatory & Standard Forms | Different Rules
Here, again the different Provinces will have different mandatory forms required of realtors when conducting and registering property transactions. One constant is that commission forms are mandatory for use by all registrants and treated differently than standard forms signed by realtors in Canada.
In most provinces the policy with mandatory forms is that only a hand drawn e-signature is permitted. Where the Real Estate Act requires an agreement to include a written signature, the signature requirement usually needs to be an electronic signature that is:
- a) A digital representation that can be seen to be an authentic representation of the individual’s handwritten signature; and
- b) Digitized and embedded permanently in the written agreement being submitted.
Either hand drawn e-signatures or a stamp e-signature can be used on standard (non-mandatory) forms in most Provinces, but again it’s best to confirm this on your own.
Electronic Signatures & Exchange of Documents
Generally speaking, electronic signatures (e-signatures) are no different from wet signatures. You and/or your clients will be affixing your name to an agreement in order to provide tangible proof that you are hereby agreeing to the terms set out in the document. Choosing to do this with ink, with a stylus, or with a digital signature serves the same purpose.
Bear in mind as well that when there are multiple parties to a contract (spouses, more than one individual on title, etc.), all parties must sign individually, although they can wet ink signatures or if you or e-signatures providers like Authentisign, DocuSign, Faltour, and more that are currently out there.
Precautions when Authenticating Signatures
It’s true that whether it’s a wet ink signature or an e-signature, there is always the possibility of fraud. Experienced realtors will always take precautions to check the identity of the clients. Asking questions about the content of documents to both spouses separately can help you confirm that both parties are aware and agreeable to the contents of an agreement.
And yes, this lack of certainty applies for wet ink signatures as well. In instances where you may not be physically present when the documents are signed it is best to keep a record ofthese conversations in your notes.
e-signatures and exchange of documents are a new development in the real estate practice, but overall the steps to take to ensure agreements are signed properly do not differ much from ‘original’ wet ink signatures – meaning the types with ink from a pen held in hand. Use common sense and you’ll be fine 90+% of the time.
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