Electronic signatures are gaining momentum in the real estate industry. Although some financial institutions are reluctant to accept electronic signatures on all documents related to a real estate transactions (such as loan documents and REO sales), the real estate industry is gradually moving towards this standard which allows for greater accessibility and convenience. As electronic signatures and other aspects of a “paperless” real estate transaction become more widespread, it will become increasingly important for real estate agents to have an in-depth knowledge of electronic signatures and electronic documents. This page provides C.A.R. members with facts and resources related to electronic signatures and electronic documents.
What is an electronic signature? An electronic signature is (1) an electronic sound, symbol or process (2) attached or associated with a contract or other document and (3) adopted by a person with the intent to sign. There are different types of electronic signatures.
What is a digital signature? A digital signature is a type of electronic signature. There is a digital code attached or embedded in the electronic document. Not only does it uniquely identify the signer, but it ensures the original content of the document and uses encryption technology to prevent alteration. Digital signatures permanently secure the identity of signers and the document’s contents. The signer’s digital identity is referenced within the digital signature at the time of signing. Once it has been signed, the document’s integrity is protected. An alteration of the original document will invalidate all digital signatures on the document and bring into question the integrity of the document’s contents. Digital signatures provide a higher level of security than other types of electronic signatures.