Received this wonderful email from a current client:
The speed this client mentions is really all predicated on the use of electronic signatures. We use DocuSign as our “e-signature processor”, which enables us to send, sign and receive real estate contracts and documents at the speed of email. It’s convenient for all involved — the clients, the agent and their clients on the other side of the transaction and the title companies. If you’ve ever tried to read a document that has been faxed repeatedly, you’ll quickly realize there is another benefit to digital signatures — the documents don’t degrade in quality every time they are sent.
Over the weekend we submitted an offer, and it was countered by the seller with this as one of the counter terms:
XXXX Realty needs to see live signatures within 72 hours of completion of contract.
A conversation with the listing agent leads us to believe that he doesn’t seem to think electronic signatures are legitimate or legal.
My first reaction to that was, “This is 2008. Get with the program.” But rather than making some snide remark, it seemed better to take the high road and present some info to the listing agent to prove to him that electronic / digital signatures are indeed legal.
To wit:
President Inks Electronic Signatures Bill
President Clinton signed S. 761, the “Electronic Signatures in Global and National Commerce Act,” into law Friday, June 20, 2000 in Philadelphia, PA. This law becomes effective on October 1, 2000 for electronic transactions and March 1, 2001 for electronic records.This law simplifies the real estate transaction by allowing two parties to treat electronic signatures with the same legal standing as “pen and ink” versions. It also establishes the legal validity of electronic records. This law includes protections that ensure consumers who wish to conduct business using the traditional pen and paper method may continue to do so.
The Electronic Signatures law provides the legal certainty and national uniformity necessary for consumers and businesses to:
Contract electronically for the purchase of goods and services, as well as the sale and lease of real property; Process mortgage loan transactions electronically; Receive related state and federal disclosures online; Transfer promissory notes electronically; Notarize transactions electronically; and Obtain and maintain electronic records of transactions.
Note the President and the year… Clinton, 2000.
Arizona Specific Law:
The Arizona Electronic Transactions Act
The Arizona Electronic Transactions Act (the “ETA”) creates statutory authority for creating contracts electronically, via computer, by adding A.R.S.§44-7001 et. seq.
As a result of this legislation, a contract formed by an electronic record cannot be denied legal effect and enforceability solely because it was formed electronically. A.R.S.§44-7007(B). Similarly, a signature in electronic form cannot be denied legal effect and enforceability solely because it is in electronic form. A.R.S. §44-7007(A). An electronic record and electronic signature satisfies any law that requires a signed writing, such as the Statute of Frauds requirement that a contract for the sale of real property be evidenced by a signed writing to be enforceable. A.R.S.§44-7007(D).
Here is A.R.S.§44-7007 in its entirety:
44-7007. Legal recognition of electronic records, signatures and contracts
A. A record or signature in electronic form cannot be denied legal effect and enforceability solely because the record or signature is in electronic form.
B. A contract formed by an electronic record cannot be denied legal effect and enforceability solely because an electronic record was used in its formation.
C. An electronic record satisfies any law that requires a record to be in writing.
D. An electronic signature satisfies any law that requires a signature.
Here is the catch with electronic signatures (at least in Arizona, it may be different in other states).
The ETA applies only to a “transaction between parties each of which has agreed to conduct transaction by electronic means. Whether the parties agree to conduct a transaction by electronic means is determined from the context and surrounding circumstances, including the parties’ conduct.” (A.R.S. §44-7005(B)).
So technically, if one side of the party doesn’t want the other side to utilize electronic signatures, they can make that demand.
But why in the world would you?
Yet this is exactly what happened in this transaction. Our buyers signed their offer digitally. The sellers countered requesting “live” signatures.
What a brilliant idea. You’re trying to sell your home in the middle of a buyer’s market, so you make a demand via counter offer that will inconvenience said buyer. Is that because you don’t know electronic signatures are legally binding, you don’t believe it, you just don’t like them, or you want to make it as difficult as possible for the people attempting to buy your home?
(Of note, these same sellers also countered the closing date the buyers requested. Our buyers wanted to close on July 31. The sellers countered with a closing date of…. July 30. This prompts a response along the lines of, “WTF?!? Are they just attempting to be as difficult as possible?”).
Home sellers — think, really think about what you want to counter. If you’ve got a ready, willing and able buyer that has submitted an offer on your home this is a good thing. Pissing them off with petty demands is just silly. I’m not saying you should blindly accept any offer you receive — of course you shouldn’t. But to counter items that in the end run make absolutely no difference to your bottom line is putting a great deal at risk. Our buyers have hundreds of other homes to choose from. Making petty demands is a sure-fire way to make their decision to look elsewhere a whole lot simpler.
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I'm Jay Thompson, and I have a little blogging problem... Welcome to The Phoenix Real Estate Guy, or "TPREG" as I fondly refer to it.
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