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Real Estate Deals Go Digital

By wmadministrator

Sharon Smith doesn’t own a computer. Like many in their late 50s, she simply never had a real need for one. Smith has precious little spare time anyway between her Fayette County family and her job at General Electric in Louisville that requires a daily commute between Kentucky’s two largest cities.

Still, when she bought a home in Lexington recently, Smith was thrilled with the idea of using the latest computer technology to purchase
her home.

Smith decided to go paperless for all the real estate forms associated with the purchase of her home. Instead of a folder jammed with papers, she received a thumb drive (jump drive) containing her offers and counteroffers, the appraisal, the actual contract to purchase the home, and the inspection, as well as other needed forms.

“I knew I could put the small drive in my safe deposit box,” Smith said. “I wouldn’t have all those papers to keep up with.”

Smith’s Realtor, Charlie Dieruf, an agent with Re/Max Creative Realty, says paperless is the wave of the future for all real estate transactions.
Here’s how it works, according to Dieruf:

Everything proceeds as normal between the homebuyer and real estate agent until the buyer is ready to make an offer on a piece of property. The agent then pulls up a copy of an offer-to-purchase form on his or her computer and fills it out electronically.

The buyer can be in the same room or anywhere else as long as the real estate agent has all the pertinent information. The agent sends the buyer a copy of the contract on his or her computer. Once everything is correct, the agent e-mails the form to the appropriate parties, who go through basically the same process.

No special software is required for the buyer and seller. It all emanates from software purchased by the Lexington-Bluegrass Association of Realtors, the first Realtor association to adopt the digital sales format.

The system generates an e-mail to those involved to register. It also generates an electronic signature for each person involved. Only that person – not even the real estate agents – has access to that “signature.” It also creates a password for each person involved, which again is completely private.

Each time there is a change, the system generates a correct, clean form. And the parties involved receive an e-mail that their electronic signature is needed for the update. Unlike paper contracts, there is no marking through and initialing changes. The parties also do not have to meet. The buyers and sellers can all sign wherever they have access to a computer.

If someone wants to check on the history of the transaction, they can click on a field in the digital form and see all the changes that have been made – kind of an electronic look back at the transaction’s progress. And if you do need a paper copy of something along the way, getting it is as easy as pushing the “print” button.

The benefits even extend into the future, according to Dieruf.

“I had a client who listed and sold a house here in Lexington and then moved to Tennessee,” Dieruf recalled. “She called back when she was purchasing a home there and said she needed a copy of her HUD1 form from her sale here. With a few keystrokes, I was able to send her the form in a matter of minutes.”

With his transactions, Dieruf said, there are three electronic versions saved: one on a backup drive he maintains, another with the Web host, and yet another with the LBAR office. (A thumb drive is no longer needed.)

If the parties are still uncomfortable with computers, or just prefer to see everything on paper, hard copies remain an option. Clearly, though, the trend is expected to tend toward digital.

Ease of use, and it’s green
And the process just got better, said Anthony de Movellan, president of LBAR for 2010 as well as operations manager for Prudential de Movellan in Lexington. On June 1, the association officially went to a new Web-based technology called DotLoop.

“The old system (called Instanet) had some cumbersome issues and did not get as widespread use as I believe this will,” he said. “It was basically a glorified typewriter that allowed the agent to get the process started electronically. It’s a little early to say (DotLoop) is the best thing ever, but it has some real advantages.”

The greatest advantage is the ease of use, according to de Movellan. Others include speed, efficiency and clarity (all signatures and changes are legible).
Dieruf adds one more: The system is green.

“We are saving a lot of paper and ink that is not going into a landfill or getting into our groundwater,” Dieruf said. “I don’t know that individually that will save the world, but a million agents across the world using a paperless system can make a significant dent.”

Both Dieruf and de Movellan are waiting for one thing, however. They want to see the closing attorneys and title companies come on board with a paperless system. That would eliminate the all-too-familiar process of signing form after form after form at the closing.

Until then, the real estate agents believe this system is a significant step forward.

“This is an example of using technology wisely to do your job more efficiently,” Dieruf said.