The Pen vs. the Pixel: Which Signature Is More Trustworthy?

Have you ever had a client who balked at the idea of signing transaction documents digitally? They may have worried about the legality of it all, perhaps wondering how something as ephemeral as an electronic signature could hold its weight against the "real world" tangibility of the handwritten kind.

It's a reasonable reaction. After all, you're asking them to trust an unfamiliar technology with the fate of what's likely the biggest transaction of their lifetime--the purchase of a home.

As an agent, you're likely familiar with eSignatures, but may struggle with explaining why they're not just safe, but actually safer than old-fashioned ink. Today, we're providing you with a little cheat sheet that you can use to counter common client objections to electronic signatures.

The Vulnerabilities of Ink

What people presume is the greatest strength of handwritten signatures--that each is unique to its owner--is actually its greatest weakness. Ink signatures are so unique, in fact, that they vary slightly each time they're written. That variability can be an issue if an ink signature is ever legally challenged.

The biggest problem with something so individual, however, is that it's usually unknown to others. Unless I'm already familiar with Sally's handwriting style, how can I know for sure that that's Sally's signature? I can't, and even handwriting experts can only establish the 'likelihood' that a signature belongs to someone; they can't establish certainty.

Written signatures are easy to forge, too, and paper documents can be modified just as easily.

Why eSignatures are Safer than Paper

Electronic signatures win on security because their digital nature means that details like the time, date, and GPS location of the signer can be tracked and logged. Modern solutions record information about the device the signer used, the signer's email address, and beyond. This data is known as an eSignature's "audit trail" and can be used to determine a signature's legal authenticity.

It's also easier to tell if a digital document has been tampered with. Once a document has been signed electronically, it can no longer be modified. If someone tampers with it after the fact, any document reader (like Adobe Acrobat) will tell you that the electronic signature is invalid. If you see this message, know that you aren't viewing the official, final document.

Will Banks Accept eSignatures?

Now the big question--will banks accept eSignatures? Up until a few years ago, that question was often no, despite eSignatures being legal in the US since 2000. Today, they're much more widely accepted. In fact, the security demands of banks and lenders have been a driving force in the development of the technology, Bank of America's famously strict security requirements chief among them.

eSignatures that are accepted by banks and are legally enforceable have the following things in common. They all:

• Indicate Intent to Sign - eSignature solutions must include a consumer consent form that's included in the certificate or audit trail. This form indicates that the signer has agreed to conduct business electronically.
• Provide an Audit Trail - As we mentioned earlier, an audit trail documents the entire history of a signature--the signer's name, email address, IP address, time and date signed, and even the location.
• Are Self-Reliant and Tamper Evident - Again, once a document is signed, it can't be modified without invalidating the signatures. If someone does succeed in tampering with it, the document must indicate this. Being "self-reliant" means that the document will indicate this invalidity all on its own, no matter the software used to view it.
• Offer Advanced Identity Verification Features - Banks want to make sure you are who you say you are, so most major lenders require identity verification through a feature known as Knowledge Based Authentication (KBA). KBA validates identity by asking a signer random questions about themselves from data pulled from public and commercial sources. Additionally, each signer must have their own individual password.

Options for eSignature Solutions

Though electronic signature solutions are available as standalone products, agents often use them in conjunction with a document or transaction management solution. This combination lets agents manage all the documents pertaining to a transaction in a single place. It also gives brokers oversight into the transactions of their agents.

In fact, in RE Technology's 2016-17 Technology Guide, all featured transaction management solutions contain an eSignature component:

• Form Simplicity
• DocuSign
• loadingDOCS

To learn more about the products above, and to see questions to ask when considering a purchase, download our 2016-17 Technology Guide. To view a full list of eSignature, Document and Transaction Management solutions, visit our Product Directory.