We now have various online or digital tools to help with all sorts of processes. You may have even heard of digitally signed real estate documents. However, you might wonder if this is a legitimate option for closing real estate sales. The short answer is yes, but there is a lot you need to know before using this technology.
Let’s explore what it takes for digitally signed real estate documents to be legally binding. We will also review a few points you must consider when using e-signatures.
The Basics of Digitally Signed Real Estate Documents
The E-SIGN Act
The Electronic Signatures in Global and National Commerce Act, or E-Sign Act, is a federal law covering online signatures. The law took effect in 2000 to provide a legal framework for using electronic documents and signatures. It stipulates that any contract with an electronic signature has the same validity as a paper one.
A digital signature carries the same legal rights and obligations as a paper document. It can provide the same legal protections for buyers and sellers in commercial transactions.
A notary public must also sign and seal the document electronically. The notary must also obtain the same information as if they are working in person on a physical document.
Is It Legally Binding to Close a Sale?
Using digital signatures to formalize a real estate deal is generally legal. A valid, legally enforceable electronic signature can be part of closing transactions. It may even speed up paperwork processing times.
However, specific jurisdictional restrictions or requirements could also apply when using e-signatures. You should always consult an attorney on high-stakes document signings like property deals.
Some lenders also have specific requirements, so even if your jurisdiction allows digital signatures, some real estate transactions require “wet” signatures because of lender guidelines.
Why Use e-Signatures?
Real Estate agents can gain an edge by utilizing digital tools like e-signatures. Through e-signature technology, agents can close deals faster. It can make the process more convenient for clients. The simpler, faster process can also open more time for professionals to focus on other client needs. It can also cut costs due to less travel and no need for physical document storage.
What to Consider When Opting for e-Signatures?
Security is one of the top concerns when selecting e-signature platforms. Look for features like digital seals and audit trails to safeguard against tampering or other interference.
To ensure the documents are legally binding, include language explicitly approving their use. Consideration should also go into selecting a reliable provider with comprehensive safety measures.
Real estate transactions require the completion of various forms and documents. But the process is much easier with digital signatures.
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