Is dotloop good or bad or an association’s intellectual property?

Last week, the California Association of REALTORS® told the transaction management software provider dotloop that users cannot fill out the association’s copyrighted forms using dotloop’s software. Paul Hagey at Inman News provided some great coverage. If you haven’t already read the article, go check it out.

dotsAs a content creator, I certainly understand CAR’s point of view. Frankly, if they don’t want to share their documents, I certainly respect that. But I questioned why one of CAR’s primary reasons for not working with third parties was to protect their intellectual property. I mean, dotloop is just an digital way to fill out a form, any form. It doesn’t seem any different than Docusign, or any one of the many apps that allow agents and consumers to edit PDF’s. I decided to talk with dotloop for their perspective. Chad Humphrey, dotloop’s Director of Industry Relations was kind enough to answer my questions over the weekend.

Hi Chad, please tell us a little bit about your company.

dotloop was started in 2009 by Austin Allison who bought his first house at 17 and sold real estate in college and first years of law school. He saw a system that was broken. His vision was to create a solution that allowed the same synergy between parties sitting at a table negotiating a deal but to provide it as a web based cloud solution. Today dotloop has over 140 employees and provides the dotloop platform to more then 645,000 real estate professionals in the US and Canada.

The California Association of REALTORS® recently insisted that their forms not be used by the dotloop system. One of the primary concerns cited in refusing to work with third party vendors is protecting the intellectual property of the Association. They’ve spent considerable time and effort building the “the best forms in the legal arena,” and want to be sure that the forms are not abused. How does dotloop’s approach to document management address the IP concerns of the associations who’ve created these forms?

This question is one of the most common questions I receive when I meet with Association leadership. There are two options:

  1. Upload from your saved files on your computer
  2. dotloop provides a library of editable forms to provisioned and active members of an association or brokerage.

The first option is to locate the PDF you’ve saved on your computer and upload it to dotloop. This can be a document you already filled out on another system or blank document. A data layer is placed on the top of the document allowing the member to place text boxes, check marks, signatures, and initials fields in the needed areas. Since the document is never touched, the existing text of the form can never be altered. This method is very similar to DocuSign, Dropbox, and other solutions that allow form editing in compliance with the DMCA Act of 1998.
The second (and most popular) method is to have dotloop provide a library of editable forms to any dotloop member that is first provisioned to be an active member of a given association or brokerage. We provision members via their NRDS ID, an association code, SSO, roster exchange, or other methods selected by the association. This fully protects the intellectual property of the Association and provides form functionality on all platforms, browsers, tablets and mobile smart devices. Since we don’t “program” the forms, per se, the existing text on the document is never altered, thus eliminating by 100% the chance of error by solutions that rewrite or “program” the forms.

In just 8 months, we have signed partnership/licensing agreements with over 34 state and local associations. There are no costs to the association or to the members to have unlimited electronic signatures, PDF storage, task management and 3rd party sharing, thereby changing “the way it has always been done” by existing form-programming solutions. Forward-thinking associations are realizing that members need choice and want a single solution that provides everything they need to get a deal done. With the procedure as it stands now, association members have to use 3-4 different fee-based solutions to complete a transaction.

The forms receive regular updates to address the changing needs of association members. How do you assure that the forms in your library are up to date?

This is very simple. When a document has a new version, the Association provides the updated document to us in either PDF or Word format. Within minutes, we can have the new document available and the old version removed from the members’ document library. If a member is uploading his/her own PDF document, it is their responsibility to ensure they are in compliance with the DMCA Act of 1998.

But ultimately, the associations have worked hard to develop these forms. Why should they allow other services like DotLoop to use them?

Great question. I don’t believe Associations should feel obligated to provide dotloop or similar services access to their forms. The obligation lies within the Association duty to provide their paying REALTOR® members the best tools available in the market. By choosing to work with a REALTOR®, consumers expect a higher level of service and the most efficient path to get a deal done.
REALTORS® pay annual dues to state associations in addition to the dues paid to the National Association of REALTORS® (NAR). In some states, it is mandatory to be a REALTOR® to practice real estate. However, in some states such as Washington, it is optional. There have been conversations recently about what benefit the Associations provide a member versus a non-member. In addition, there are ongoing conversations by Associations that are rethinking their benefits packages to allow members the choice to run their businesses with the products that work best for their businesses while protecting the intellectual property of the Association.

It was stated by Mr. Singer that CAR expends a lot of resources making sure the forms are up to date and legally ironclad. By not allowing systems like dotloop to reprogram the forms or altering pre-existing text in any way, all doubt that the forms are legally ironclad is removed. Mr. Singer further stated that by exclusively providing REBS software to the members allows the Association to provide the software at an affordable price. It could be assumed that this statement implies that there are no alternatives in the market that offer members better pricing on electronic signatures, file storage or 3rd party sharing, which is provided at no cost to the members with the Freemium Edition of dotloop.
I have stated many times that those who dislike change will dislike irrelevance even more. Members are questioning the relevance of the Association to their business. The industry is changing and technology is moving forward faster then ever. Software solutions that only work on a PC or Internet Explorer are quickly becoming obsolete. With 31 being the median age of today’s first time homebuyer, as estimated by NAR, they are more tech savvy than ever, demand results, and expect to be able to complete the transaction process without a printer, scanner or fax machine, and they want to do it from the comfort of their couch.

Members are moving away from using 3-4 fee-based systems to get deals done. They want a solution that makes their job easier and more efficient. A disruptive start-up company, dotloop is changing “the way it’s always been done” by giving Associations and their members a no-cost, all-in-one solution that puts people first. It’s called peoplework and in today’s fast moving industry, it’s the human companies that will continue to challenge the status quo.

Learn More This Thursday – Free Webinar

I want to thank Chad for his responses. Chad also ran me through the product and I can see many good reasons why an association should consider working with them. If you’d like to learn more about dotloop and how they work with associations and brokers, check out this free webinar on Thursday June 13, 2013 1:00 PM – 2:00 PM EDT. Sign up here.

Photo: Creative Commons license via Flickr user JOE-3PO

2 thoughts on “Is dotloop good or bad or an association’s intellectual property?

  1. Nancy Crutcher

    Thank you so much for sharing this insights and information. Though, I not so familiar with this but, I see that that decisions lies on every company. If they don’t allow third party members then I believe that it is their decision. That is why every Association should provide their customers the best tools in the market that they can use.

  2. jeffspelblog

    Dotloop is terrible, in my opinion. All Dotloop does is let a party sign – The buyer is sent a “set” form which they can’t copy – they can’t make corrections and changes to the form. You can’t forward it to your attorney for review, unless you send him your password. It has some kind of “copy protection” on the form, which means you can’t copy and paste the text to make changes (and I’m talking about the text my Real estate agent wrote – not the “form” text.) You can’t even print it out the entire form for your records. You can’t save a paper or an electronic copy for your records. Why’s that, if not to protect the Real estate agents and screw the clients?

    Seriously, to save copies of the transactional paperwork, you need to take photos of your screen – Thanks Dotloop – you’ve proven you are only thinking of protecting the realtors at the expense of the home buyers.

    And yeah, now they want to attach California Association of Realtors and worm their way into their organization. I’d suggest CAR beware.

    This next may be the Real estate agents fault – but Real estate agents are using it to send every draft (or is that how its designed to work?) Real estate agents should send pre-execution drafts of the documents without the Dotloop feature – Dotloop has no other functionality other than a signing platform, which is the LAST stage of contract drafting, yet they send the first drafts through the Dotloop system too.

    Some attorney might even be able to make the case that the way its designed is intentionally deceptive, it leads buyers to think they have no right to make changes or to have input. I’d bet my hat that thousands of buyers sign documents they either don’t understand or would like to change, but don’t because of Dotloop’s “take it or leave it” design. How about an option saying “you have the option not to sign until you are satisfied with the document” or how about a button for: “This document isn’t correct – make changes”. It’s not like realtors have any real legal training, and we are talking about a buyer’s most important purchase of their lives. So Dotloop makes it easier to present bad deals to clients, or to represent both sides of a transaction and shove Dotloop “non-paper” to the novice for signing.

    Also, due to its “take it or leave it” design, instead of speeding up the process it slows it down, as the buyer must retype all the information into a separate email, send it back and wait for the Real estate agent to type that into the Dotloop document (and screw it up the second time), so it keeps the Buyer or the Buyer’s attorney from quickly making corrections.

    It is typical real estate agent SOP, IMHO: present the document at the last moment, tell the novice buyer to sign it immediately, tell them it doesn’t need to reviewed by their attorney (it will slow it down!), and make the document appear to be “unalterable” by the buyer, which bullies the buyer into thinking that his input isn’t allowed and he’s seeing a “take it or leave it” offer – FROM HIS OWN AGENT! Don’t think so? The Dotloop form is online (you don’t even get the full copy in your inbox), unprintable, and comes with an obnoxious blinking blue “sign now” bar that blocks your view of the type on the form, and continues to block your view until you click on it, – what better way to say: “Don’t read it, just sign it.” In fact, there is nothing you can do with a Dotloop document but read it and sign it. Seriously, Real estate agents are bad enough at pushing buyers into making quick decisions, offering bad options for buyers, and trying to keep buyer’s attorneys out of the loop – this is just another crude tool to help the market achieve that.

    It isn’t about legal protection for the buyer, its all about getting the signature for the broker – and given the past history of the real estate booms and busts – it should sell like hotcakes.


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