Wednesday, May 11, 2005
E-Transactions: are we ready ?
It seems more and more that technology and the Internet are going to be the future of real estate sales. In Canada one-third of the people are online. This means approximately ten million Canadians, give or take a few. It is projected that by the end of the decade this number will reach one-half of the population, if not more. Pressure is already mounting, in fact, for real estate transactions to take place entirely online.
To be sure, buying and selling a home remains a complex process, with clients needing someone to guide them through the transaction and protect their negotiating positions as well as to provide knowledge of neighbourhoods, future development plans, taxes, zoning, transportation, schools and community services. But more and more baby boomers increasingly like the convenience afforded by online browsing, and today's children are going to become tomorrow's real estate consumers. There is no doubt in the minds of industry analysts, that e-transactions will become common practice in just a few years.
But exactly what is an e-transaction? It is an electronic sale that includes all the contracts and ancillary documents, and it is done entirely online. Everyone, including sellers, agents, buyers, mortgage lenders, notaries and lawyers will complete their part of the transaction online. The banking industry, for example, has adopted already the online approach with mortgage applications being received by individual branches and the final approval coming from 'downtown' . And it is becoming more and more common practice for appraisers to prepare their reports online, without the customary tour of the property being bought and sold.
Electronic signatures are key to e-transactions and here in British Columbia the Government has paved the way by passing the Electronic Transaction Act. Under section 11(1) the legislation states:" If there is a requirement under law for the signature of a person, that requirement is satisfied by an electronic signature". The legislation is taylored to encourage, wherever practical, the acceptance in law of the use of electronic records in circumstances where non-electronic records are used. This includes Contracts of Purchase and Sale with electronic signatures.
Real Estate Chronicle