Business

Electronic signatures and house flipping – a case study

Nov 12, 2020

This article was written by a husband and wife team, who recently have gained experience in house flipping. It illustrates how an e-signature service like Countersign can improve and speed up paperwork needed to complete the house flipping process.

Last year my wife and I decided to take some of our savings and invest it in real estate. We had been interested in house flipping for several years. After researching properties and making cost-effective improvements in the property, we found a nice house in a good neighborhood that needed a little bit of love.

Contract creation and execution were significant parts of the process. As novice investors, we decided to retain a real estate agent who specializes in investment properties. While we did meet her in person to look at the property, most of the work was done electronically.

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Countersign made the property transfer easier

The agent used Countersign, a service that allows parties to send, receive, and sign contracts electronically. After we entered into a contractual relationship, we told her the type of property we were looking for. As new investors, we were looking for a place that needed some minor cosmetic improvements. She helped us register for a multiple listing service (MLS) to find a suitable property.

The agent sent us several documents through Countersign. When the agent sent us the contracts, we received a notification in our email. We clicked on a link in the email, taking us to the Countersign application. There we were able to review the documents. These documents included purchase agreements and refinance documents. We were able to view the documents and make changes to them. When things looked appropriate, we electronically signed the documents and sent them back to the real estate agent.

We could always view the documents later as they are securely stored on the cloud within Countersign.

Wife and husband house-flipping team on Countersign

The agent assured us that all the signed documents are legally binding through the Electronic Signatures in Global and National Commerce (ESIGN) Act. She also ensured we could always view the documents later as they are securely stored on the cloud within Countersign. We would also see if anyone made changes to our records to protect against fraud or deceit. We signed the closing papers and got preapproved for a loan in no time.

Countersign as a partner during the planning and construction phase

Once we received financing for the property, we began the renovations. Much of the work we could do ourselves, but we wanted to bring in experts to help with the plumbing and electric systems.

We realized electronic signatures and house flipping go hand-in-hand. Therefore, we decided to use Countersign to hire a plumber and electrician. We drafted some basic contracts with the help of an attorney friend. As we only had to send out a few contracts, we could use the service for free. This process was as simple as uploading the contracts and sending them to the plumber and electrician. We receive a notification that they had signed the contracts and knew a contractual relationship had formed. These documents are stored on the cloud, so we did not need to store them on our computers. We do not have to worry about these documents being lost or destroyed, as there is always an electronic back-up. We also felt good about Countersign’s Google-based security, which we have heard is similar to banks’ security systems.

We applied for a renovation permit through our city. We did this because we wanted to build a deck with a height that required a permit. We filled out the required forms online to get this permit. We also submitted our plans for the deck electronically and had the city sign off on them in Countersign. It was a fast and easy process. Now we are provided with security if the future buyer asks if we completed the construction with proper permitting. It will also help when the city inspects the property to make sure everything is up to code.

We had to consider a lot when flipping the home, including the plumber and electrician costs and the materials needed. This work would have been more laborious and take longer if we had to be waiting for contracts to be signed in the mail or continually traveling back and forth between city hall and the worksite. It also made the whole process more secure, as we could have pointed to the electronically stored documents if any of our contractors disputed any of the terms of the agreement. Countersign and electronic document storage helped make this complicated process a lot easier, and we are glad we used them.

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