As a board member of a statewide organization, I must sign an annual confidentiality agreement. This year, rather than signing a paper document, I received a request for an electronic signature.
If you’ve read this column for any length of time, you know one of my favorite sayings: In any agreement, the large print giveth and the small print taketh away. This is why it is so important to read every word. Yet, I was tempted to quickly sign the document and get if off my screen. Companies like DocuSign and Panda sell convenience. Rather than having you read each page, the electronic signing process allows you to go to each spot that requires initials or signatures and then hit send. It is incredibly easy to sign our rights away.
For the confidentiality agreement, I resisted the temptation to sign and send. Instead, I read the document and ended up finding some problematic language. Keep in mind, I sign an agreement like this every year, so it would have been easy to assume I’d already read this document (as my fellow board members assumed). However, this year’s agreement included new language that prevented me from “disparaging” other board members at the risk of being sued and then having to pay their attorney’s fees.
While I had no plans to talk poorly of the other board members, I realized that if I signed the document, I would not have been able to file an ethics complaint should the need arise. When I brought this to the organization’s lawyer, he apologized, admitting the document’s language was imprecise and ill-advised.
One of the most important documents many people sign is the purchase agreement for a house—usually the single biggest financial investment they will ever make. Making it easy to sign agreements is a good business model for DocuSign, but when you sign any agreement electronically, be sure to slow down and read the fine print.
The documents related to real estate purchase agreements, disclosures, and inspections are the means by which everyone involved can understand the following: 1. What is being exchanged, 2. The terms of the exchange, and 3. The condition of the assets. Sometimes folks are tempted to sign agreements without reading them, figuring their Realtor knows best or that standard agreements used by thousands of people must be fine to sign.
This attitude outsources your responsibility to others. You may have the best Realtor in the world, but humans make mistakes. Your Realtor may understand exactly what a document says and believe it is entirely reasonable and appropriate, but you may disagree. Also, a missing disclosure, for example, could be an honest mistake, but the omission could cost you a bundle. It is up to you to read all the documents and ask questions about anything you do not understand or agree with.
If you are asked to sign a document electronically, please slow down and review the details. Set aside a few hours to read things carefully with a notebook to jot down questions or concerns. Review the precise terms of the purchase offer, the natural hazards disclosure, the pest and fungus inspection report, and the dozens of other details the comprise the transaction. Realtors can do a lot to support you before documents are signed. But once signed, a contract is legally binding and your Realtor’s hands are tied.
Interestingly, when I am completing the continuing-education courses to maintain my real estate license, each page of information is displayed for a certain number of minutes before I can move on. I know this approach would put DocuSign out of business, but it sure would be good for people who need to slow down and digest the information they’re signing.
If you have questions about property management or real estate, please contact me at email@example.com or call (707) 462-4000. If you have an idea for a future column, share it with me and if I use it, I’ll send you a $25 gift certificate to Schat’s Bakery.
Dick Selzer is a real estate broker who has been in the business for more than 45 years.