Some real estate firms have significantly reduced the need for paperwork.
They say the only two sure things in life are death and taxes, and both of those create a great deal of paperwork. The only other experience that comes close to accumulating that much of a trail is buying a house.
Fortunately, some real estate companies are changing that.
According to Bob Burns, president of Coldwell Banker, “Our goal isn’t to go completely paperless, because we want to provide our clients with the service they’re most comfortable with. But we’re encouraging our sales associates to go as paperless as possible.”
Despite publicity to the contrary, most experts say the security measures for paperless transactions far exceed those of traditional paper methods.
“Security is not really a concern,” says Ken Clark of VIA Group. “The accuracy of the system is greater than ever.”
In fact, Burns says the online systems that most real estate firms use do more than just authorize signatures. “The system provides a trail that tracks every step of the process and every time the document was accessed,” he says. “With paper, there’s less assurance that the information on that paper is protected.”
When that information includes sensitive details like Social Security numbers, clients are naturally concerned about who has access to it and what happens to that paperwork after the sale is closed. Because state law requires records to be maintained for several years, that information is potentially vulnerable long after the transaction is complete.
“Our transactions and records are stored online,” Clark says. “We don’t keep any paper files, but our records online are retained securely for five years, as required by law.”
In addition to providing security, the electronic trail attached to each document also ensures greater transparency. “We can track who has done what when because our system includes a routing list and notifies us of completed tasks. So if we’re waiting on an inspection or an appraisal, we can check that routing list and see whether it’s been done or not,” Burns explains.
Most companies that offer a paperless system cite convenience as a primary motivation.
“There’s no question technology has allowed for a more paperless process,” says Iowa Realty’s Brennan Buckley. “It can be more convenient for both homeowners and real estate professionals because the process can take place anywhere instantly.”
Clark adds, “This allows us to operate in a manner that people want these days. Our goal is to provide a seamless transaction, and this makes that possible.”
Burns says, “Fifteen years ago a listing and sale required filling out the paperwork, driving back and forth to present the paperwork and the counteroffers, and back and forth until it was accepted. With electronic signatures and exchange of paperwork, we can do things much more efficiently.”
“It cuts down the time it takes to complete a transaction,” Clark explains. “And there’s a tremendous advantage to that. It saves everyone money and improves the speed and accuracy of the process.”
Although most professionals expect the electronic options to continue to grow, they don’t foresee a completely paperless trail in the immediate future.
“We serve multiple generations of customers with multiple generations of salespeople,” Buckley says. “We’re probably the only industry that serves such a wide clientele with such a wide range in our salespeople.”
Because of that, one customer may be more comfortable with a paper system and others are perfectly fine with using their finger to sign on their phone while they’re out to dinner.
No matter which method is used, Buckley says, “That choice has to be balanced with the necessary relationship building. Buying a home is a large financial and emotional transaction, and it has to start with a personal connection.”
“None of this takes away from the personal side of our business,” Clark emphasizes. “We still base everything on face-to-face interaction to build that rapport. The slickest system in the world won’t do any good if we haven’t connected with our clients first.”
Burns adds, “So much of what we do is the relationship—counsel, service, and representation. The transaction itself is the culmination of that. The manner in which the paperwork is signed is irrelevant really.”
Avoiding death and taxes is still impossible. But that paper trail at closing is getting smaller all the time.