The first house sale and purchase agreement in the world without pen touching paper has been finalised in New Zealand.
The sale and purchase agreement was drafted, e-signed, negotiated, edited, accepted and finalised for a residential property in Christchurch, New Zealand, without touching a single piece of paper or a pen.
Michael Morris of One Agency Morris Properties in Christchurch was the sales agent and the deal was processed using the Realforms platform. The sale involved four vendors and one purchaser. The conveyancer for the purchaser and vendors were based in Christchurch.
“This is groundbreaking – everyone in New Zealand should be proud of what has been achieved,” Realforms CEO Jordan McCown said.
“This is the future of the way business will be done in real estate, and indeed in lots of other contractual areas, and it’s great to be a leader and partner in it.”
The looser legislation in New Zealand allows the process to be completed electronically, something which isn’t possible in many Australian states.
“Initially we were going to launch in Australia, but their e-signature legislation was archaic in comparison to the more modern legislation in New Zealand,” Mr McCown said.
“Plus, Sale and Purchase Agreement for Real Estate (S&P) legislation varies between states and territories in Australia, and e-witnessing is not allowed in most Australian states and territories. Our digital S&P can be used from Cape Reinga to Bluff and e-witnessing is legal in New Zealand.”
“Before Realforms, real estate sales agents had limited tools to complete sale and purchase agreements. Agreements are negotiated, which involves crossing out the property price and getting all parties to initial. In addition, the vendor’s and purchaser’s conveyancers usually request changes. These changes involve editing and adding bespoke clauses to the agreement,” said Mr Morris.
“This previously required parties to hand-write these changes and then get all parties to initial. The process required agents driving around town collecting initials, lots of printing, scanning and faxing, over and over again.”
How did it work?
Michael Morris started the process by drafting the digital S&P through the Realforms web application, entered the purchasers’ details, linked their email address to their e-signatures then, through the application, emailed the digital S&P. The purchasers digitally accepted each section of the S&P (this usually requires printing and initialling each page), were prompted to download a government guide and e-signed (usually requires printing, ink and scanning) and submitted the agreement.
The S&P was sent to the vendor’s conveyancer, who then requested three amendments on three separate occasions. Michael, on each occasion, simply made these amendments in the Realforms web application to the S&P and resent the agreement to all parties, who digitally accepted the changes. Realforms provides digital change highlighting and acceptance. This replaces the cumbersome process of handwritten changes, initialling, printing and scanning.
The four vendors, two of whom were solicitors, then electronically signed and submitted the digital S&P. Michael then dated the agreement and clicked ‘finalise’, at which time the Realforms web app locked the document from any further online changes and attached an audit trail of who did what and when.