Electronic Signature: How to Form and Use it When Buying a Home

Purchasing real estate abroad most often takes place remotely. The buyer selects a property online, negotiates via video calls, and documents are exchanged in digital form. However, there is one important element that is often overlooked: the electronic signature.

The problem is that in everyday use an electronic signature is frequently understood as an image of a handwritten signature inserted into a PDF file or a scanned version of it. In reality, a true electronic signature is a cryptographic mechanism that links the signature to a specific person through an electronic certificate.

We have prepared material that explains in detail what an electronic signature is, what it is used for, and how to obtain one.

What is an Electronic Signature

An electronic signature is a technology that allows documents to be signed digitally in a way that makes it possible to verify who signed the document and when. It also confirms that the document has not been altered after signing.

An electronic signature consists of three main components:

• Cryptographic key. The signature is created using a private key. Verification of the signature is carried out using a corresponding public key.
• Certificate. The certificate links the signing key to a specific person or company. It usually contains information about the owner, the validity period, and details about the authority that issued the certificate.
• Certification authority or trust service provider. This is an organization that issues certificates and is responsible for identifying the person receiving one. In the European Union, such organizations operate under the eIDAS regulation and are included in official lists of trusted providers.

In many countries electronic signatures are divided into several levels:

• Simple electronic signature. Examples include signing by email, entering an SMS code, or ticking a consent box in a system. This type is suitable for basic tasks.
• Advanced electronic signature. It is linked both to the individual and to a specific document. Typically it relies on technology that reliably detects changes to the document and confirms that the signature was created by a particular person.
• Qualified electronic signature. This is the most stringent form in the EU. It is based on a qualified certificate issued by a recognized provider and in many cases has the same legal effect as a handwritten signature.

In remote real estate transactions banks require an electronic signature to identify the client and confirm operations. It is also needed for signing various documents, including agreements with agents or lawyers, reservation contracts, approval of annexes and terms, utility connection agreements, and insurance policies.

It is important to understand that electronic signatures as a technology are recognized in almost every country. However, the type of signature that is considered sufficient and the purposes for which it can be used are determined by national law.

Looking globally, three main regulatory models can be distinguished:

• Strict hierarchy of signature levels. There is a clear division between simple, advanced, and qualified signatures. The state officially maintains lists of trusted certificate providers, and the qualified signature has the highest legal status. This model is common in the EU.
• Broad recognition of various electronic signatures. This approach is used in the United States. The law allows many different forms of electronic signatures, but actual practice often depends on the requirements of a particular state, bank, or registry.
• National digital identification. In these countries the electronic signature is closely linked to a government-issued digital ID for citizens. Examples include Estonia, Finland, and Denmark.

Where an Electronic Signature is Needed in a Remote Real Estate Purchase

An electronic signature is required to open a bank account, sign banking forms, submit a mortgage application, consent to data checks such as credit history, compliance and sources of funds, confirm large transfers, and process insurance documents related to a loan.

For smaller transactions a bank may accept a simple electronic signature combined with additional identification. However, when arranging a mortgage, conducting compliance checks, or making large transfers, banks usually require an advanced or qualified electronic signature, or a national digital ID.

When concluding a real estate purchase, an electronic signature is needed for documents signed with the agent, lawyer, developer, or property management company.

Typical documents include:

• contract with a realtor or agency;
• legal services agreement;
• property reservation agreement;
• confirmations of timelines, terms, and annexes to agreements;
• property management agreement after purchase;
• service contracts such as renovation, rental management, or maintenance.

Parties usually require an advanced electronic signature only when documents involve money, sanctions, or legal responsibility. In other cases, a simple signature is generally sufficient.

In countries with developed digital infrastructure, an electronic signature increasingly serves as a key to actions that previously required a personal visit, including:

• submitting applications and requests to government authorities;
• performing registration actions in property registries;
• obtaining extracts and certificates;
• receiving tax notifications related to the transaction or the property;
• submitting applications for utility and service connections through government portals.

In these situations, a national signature based on a government digital ID is typically required. A foreign certificate may not be accepted even if it is of a high level.

It is also worth mentioning the option of working through a representative. The electronic signature of the principal rarely plays a decisive role, while the authorized representative almost always actively uses an electronic signature in daily document processing.

How to Obtain an Electronic Signature

When a person first encounters an electronic signature, the main source of confusion is usually the process of obtaining it. Procedures vary from country to country, but the underlying logic is largely the same everywhere.

Before applying for anything, it is important to clearly define the intended use cases. In a remote real estate purchase, an electronic signature is most often needed for:

• communicating with banks and signing financial documents;
• submitting applications and consents within KYC/AML procedures;
• signing contracts with a realtor, lawyer, or property management company;
• interacting with government services and registries, if the country supports this;
• arranging insurance, utility contracts, and service agreements.

If the primary goal is interaction with banks, it almost always makes sense to obtain the highest level of electronic signature. If the signature is needed only for service contracts or correspondence, a simpler form may be sufficient.

The next step is to choose a service provider. Electronic signature certificates are issued by certification authorities, which may include:

• government institutions;
• banks;
• private companies accredited by the state;
• operators of national digital ID systems.

Before selecting a provider, it is important to check whether its certificates are recognized in the country where the transaction will take place. If they are, it is also worth confirming whether specific organizations, such as the bank, agency, or lawyer, accept signatures from this provider.

To issue an electronic signature, the provider must verify the applicant’s identity. The methods can vary and may include:

• a personal visit to an office with a passport;
• video verification through a secure platform;
• identification through a bank;
• confirmation via a national digital ID, if available.

The higher the level of signature, the stricter the verification process. For a qualified signature, proof of identity is almost always required.

After identity verification, the user is offered a way to store the signing key. This is usually one of the following options:

• USB token or smart card. This is secure but not always convenient for individuals.

• Cloud signature. The key is stored by the provider, and the user confirms signing through an app or code. This is the most user-friendly option for most people.

• Mobile signature, or SIM-based signature. The key is linked to the user’s SIM card, and signing is confirmed via the phone.

Once the process is completed, the client receives an electronic certificate, which is typically valid for one to three years. After expiration it must be renewed.

To obtain an electronic signature, applicants are most often required to provide:

• a valid passport;
• proof of residential address;
• a contact phone number;
• sometimes a tax identification number;
• in some cases additional documents for non-residents.

After receiving an electronic signature, it is important to pay attention to security. If the signature is cloud-based or confirmed via phone, two-factor authentication should be enabled.

Before signing any document, the user should carefully check its version, date, and content. After signing, the final file containing the valid signature should be saved. If the document is legally significant, it is advisable to first send it to a lawyer or bank for review and only then apply the signature.

In everyday use the process is relatively simple. The user uploads the document to the provider’s system or application, confirms the action with a code or biometric authentication, and receives a file containing a cryptographic signature mark.