the cloud and e-signatures - illinois license law

Cloud Storage & e-signaturesARE MY DOCUMENTS SAFE? ARE E-SIGNATURES REAL?

CARRIE J. BEY-LITTLE, B.S., BROKER

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The Goal of the Course• What is an electronic signature?• E-signatures and how they play a role in a Real Estate Agents business, the

Consumer & Your firm.

• Are electronic signatures legal?

• E-signatures and how they work

• E-signatures, the state of Illinois and the U.S.

• The benefits to e-signatures and drawbacks to e-signatures

• Cloud Storage & Transaction Management

• Short-sales & REO as it applies to e-signatures and Cloud Storage

• Choose wisely when deciding on any e-product

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What is an electronic signature? • The ability to sign a document on a computer

• Laptop

• Tablet

• Smart phone

• All in an electronic format

• (5 ILCS 175/) Electronic Commerce Security Act – State of Illinois

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E-signatures and how they play a role in a Real Estate Agents business, the Consumer & Your firm• E-signatures are changing the way we do business as agents and

consumers.

• With the new technology available agents are able to work more efficiently, keep better files for their clients and the companies they work for.

• Today’s agent can produce better quality documents for their clients at a much faster pace.

• The tech savvy agent is setting a new standard for how we do business.

• If you aren’t using e-signatures now is the time to learn the products so you are able to keep up with technology that is changing constantly

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Are electronic signatures legal?• Yes, Electronic signatures are legal in the State of

Illinois.

• Yes, Electronic signatures are legal in the United States

• Illinois formed the (5 ILCS 175/) Electronic Commerce Security Act.

• Uniform Electronic Transactions Act  (U.S.) – adopted by 47 states in the U.S.

• Washington, New York and Illinois are the

3 states that adopted their own Acts

for electronic signatures

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E-signatures and how they work• Documents are signed on a computer, Laptop or tablet

• E-Signatures formats

• The best e-signature formats are those where the document can later be accessed by all parties signing the document and when certification is available

• An agent will complete a document using a pdf creator or e-signature program.

• Once the document is completed the signer may sign in front of the agent or when sent via email.

• After all parties have sign everyone should automatically receive a copy

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E-Signatures flow chart

Buyer TwoSigns 2nd

Step 1. Buyer’s Agent

Completes document

Buyer OneSigns 1st

EveryoneReceives a CompletedDocument

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E-signatures, the state of Illinois and the U.S.

• Illinois – Electronic Commerce Act

• Illinois – must use a product that provides a certificate proving how the document was signed.

• Signature Device – Unique information, such as codes, algorithms, letters, numbers, private keys or personal identification numbers. (5ILCS 175/5-105)  

• Uniform Electronic Transactions Act  (U.S.) – adopted by 47 states in the U.S.

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Benefits for Real Agents

• Saves time

• Saves money

• Saves Paper

• Creates legible document

• Work from anyone

• Store documents in the cloud easily

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Benefits for the Consumer

• Clients are able to sign at an off-site location (ie: out state clients, clients on vacation, when there are multiple signers involved and they are in two different states, great for the busy client.

• Many transactions call for signatures with multiple clients. E-signatures make it easy to have a document signed and returned quickly

• Documents are legible.

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Benefits for your Firm or Brokerage

• Businesses are able to provide flexibility to their agents, admins and brokers

• Easy to sign and gain access to documents

• Legible documents

• Available at your fingertips from anywhere

• Re-image offices – smaller spaces because less space is used for document storage

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Drawbacks for Real Estate Agents

• Learning curve for the less tech savvy agents

• Could be open to fraud – best to use a program with history and certification processes

• The lender wants wet signatures

• The short sale bank or

negotiator may require

wet signatures (signed

with a pen)

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Drawbacks or the Consumer

• Doesn’t want to sign electronically

• Doesn’t have email

• Difficult to use

• Not Tech Savvy

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Drawbacks for the Real Estate Company

• Not able to invest in the products

• Not sure where documents are located

• Agents using different platforms

• Unable to train the agents

• Might be difficult to use

• No time to learn the product

• Might elect to have a policy in place for e-signatures and cloud storage

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Cloud Storage

• Illinois Real Estate License Act – Administrative Rules Section 1450.755• Document Storage

• All transactional documents must be kept for 5 years

• Hard copy or electronically• Escrow Records

• Escrow records must be kept for 5 years

• The most current 2 years must be kept on-site

• Must be able to be produced with in 24 hours• Cloud Storage – Many choices

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Where is the Cloud

NEC.com

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Transaction Management

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Are My Documents Safe?

• Yes

• Agents should make sure they are using a secure platform

• It’s easy to make a mistake and share a document with the world

• Choose a storage system that includes secure access with a log in and password

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Short sales & REO as it applies to e-signatures and Cloud Storage• Short sales• Most short sale banks will accept e-electronic signatures

• Banks like Bank of America have resources where the sellers, buyers, agents and attorneys agree to sign electronically

• Smaller banks tend to accept electronic signatures

• If you are using an e-signature product be prepared to have your clients resign using wet signatures (with an actual pen)

• Or provide documentation to the bank that e-signatures are legal

• Some banks may require that the affidavit be signed at closing by all parties

• REO• Most REO – Bank owned sales may require that buyers sign using a pen (wet signatures)

• HUD – HUD homes when purchasing a HUD home buyers will still be required to actually sign the paperwork.

• As of January 30, 2014 FHA announced that they would accept more documents with electronic signatures. HUD No. 14-011. Allowing buyers to sign loan documents

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Choose wisely when deciding on any e-signing product, Cloud Storage or Transaction Manager

• Do your research

• Docusign has been indorsed by the National Association of REALTORs

• The best systems use certification platforms (questions to ask: Can I track show signed, when, where and how?

• Other e-signatures products used by real estate agents include:

• Tablets or any computer with a touch screen are great for electronic signatures

• Cloud Storage products that work great with electronic signatures include: 

• Transaction Management

• These are suggestions. There are many products to choose from.

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Paperless Products

A few options but not limited to these paperless tools

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The Trends in paperless• At least 115,000 agents use Docusign• E-signature program

• Also has a transaction room product

• 40,000 people signup to use this system everyday

• Over 2500 brokers use the Dotloop dash board• All inclusive

• E-signature program

• Brings everyone into the transaction as if they were all in the same room in a virtual format

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Review & Exam• Websites to view

• Fannie Mae www.homepath.com

• Freddie Mac www.homesteps.com

• Always check with a short sale lender to verify that they take e-signatures. Most banks will take e-signatures. Always do what’s best for your client.

• www.facebook.com/TheRealEstateTrainer

• www.twitter.com/CarrieBeyLittle or #SocialCarrie

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Thank you• "The illiterate of the 21st Century will not be those who cannot read

or write, but those who cannot learn, unlearn and relearn.“ Alvin Toffler

• Why Not learn the technology today so you are not left “list-less”.

• Don’t wait to use the e-signature products. There is nothing like trying to learn something new because you are forced to.

• Docusign.com, dotloop.com, evernote, pdfexpert dropbox, google drive

• Illinois Real Estate license law