Every good real estate agent wants to expedite the sales process and make it easier for buyers and sellers. Electronic document signing technology can help, especially when dealing with out-of-town buyers or sellers, or whenever arranging an in-person meeting is difficult. But, you face additional risks when using electronic document signing technology.
Risk #1: Ensuring a Valid Signature
Without in-person verification, how can you be sure that the electronic signature you have is valid? Fraud is a real concern with electronic signatures. The wrong signature can lead to unenforceable contracts and many other major legal issues. Ultimately, you’ll be on the hook to clean up any mess that comes from a fraudulent or forged signature.
Authenticating the identity of all signatories is of primary importance. You may require a form of two-factor authentication to validate a signature (a video of the signing, for example). There are many technologies that allow you to verify the authenticity of a signature without being in physical proximity. Many agents require the participation of a notary. Whatever you choose, an extra bit of diligence here goes a long way in protecting everyone involved in the deal.
Risk #2: Using Non-Compliant Software
Whether you’re new to electronic document signing or not, it’s a timely reminder: All electronic signatures need to meet certain requirements in the United States.
Electronic signatures need to comply with: Electronic Signatures in Global and National Commerce Act, the Uniform Electronic Transactions Act, and the Government Paperwork Elimination Act.
These key pieces of legislation require:
1. Intent to sign,
2. Consent to do business electronically,
3. Association of the signatures with a record
4. Retention of records.
Most modern document signing solutions use this legislation as a starting point, and many go beyond what is required. Technology has developed rapidly since these Acts were introduced. It’s worth investigating all options for electronic document signing software and ensuring you deal with a reputable brand in compliance with all relevant legislation and standards.
Risk #3: Vulnerability To Hackers And Cyber Criminals
As with any technology, you need to manage the risk to reduce your vulnerability to hackers and cyber criminals. The last thing you want is your electronic signature being stolen and used for identity theft. You need to protect your clients’ signatures and personal details as well.
This means taking a proactive approach to your security through strong virus protection and systems in place to protect important data for your real estate business. For some helpful strategies to do this, check out our other blogs about preventing cyber attacks and cyber security planning.
Risk #4: Not Having Adequate Insurance When Things Go Wrong
Because of the efforts of leading companies in the industry, electronic document signing is quickly becoming a safer, more stable technology. For instance, leading electronic signature services company DocuSign has partnered with the National Association of Realtors® to create a solution, especially for real estate agents. Government agencies including the Department of Housing and Urban Development now trust the technology as part of their everyday business routine.
Nevertheless, it always makes sense to maintain adequate insurance in case of a mishap. Situations can occur through no fault of your own, and you want to be sure the future of your business is protected.
Do you have errors and omissions insurance that will cover you for these types of problems? With more than 20 years of experience helping real estate professionals, CRES offers a premium Errors & Omissions Insurance solution tailored specifically for real estate brokers and agents like you. Both our company and individual CRES E&O + ClaimPrevent® policies include Legal Advisory Services 7 days a week.
Why not speak to an experienced real estate E&O insurance specialist at CRES to learn how a superior real estate E&O policy can protect you. Contact us on our toll-free number 800.880.2747.