There’s a lot of paperwork involved in the buying and selling of real estate.
Those of us who dislike clutter and unnecessary papers hanging around may have the tendency to want to toss them after closing day. Honestly, it’s fine to shred a lot of those papers, but there are some documents you’ll need to keep stored just in case.
The sale of a house always begins with the purchase agreement, from the first offer to the final ratification. The purchase agreement is a legally binding contract between the buyer and the seller. It lays out the purchase price and all the terms and conditions of the sale, and each and every detail must be strictly followed and obeyed. It’s important to keep this document just in case there’s a condition or contingency that isn’t met. You’ll need proof of the terms if you intend to take legal action against the party that isn’t following through.
Any Addenda or Amendments
These are documents that alter the terms of your purchase agreement. They most often relate to a home inspection, appraisal, or survey. Say the home inspection reveals an issue with the roof and the sale becomes contingent upon the seller having the issue repaired. This will change the terms of the original purchase agreement, so you should keep these with the agreement just in case.
Sellers are required by law to fill out a seller’s disclosure that discloses certain problems or issues with the home along with any repairs that have been made. You should absolutely keep this document to prevent any “he said/she said” situations. For example, if you move into the home and find that a seller has done a shoddy repair job or unpermitted addition and tried to hide it by not disclosing it, you may have legal recourse.
Home Inspection Report
After the inspection is completed, your home inspector should provide you with a report that includes a detailed list with photos of their findings. Keep this on hand for any future repairs you might need to make that you don’t ask the seller to perform. That way you’ll have a record of everything you need to take care of and can even use it as a reference for any contractor or handyman you might hire in the future.
Title Insurance Policy
We’ve talked a bit before about title insurance and why you need it. There are separate policies for lenders and buyers, so it’s always a good idea to get one to protect yourself. Basically, it offers protection against any liens against or claims to the home that already exist and could affect your ownership rights. Keep your title insurance policy information in case a former owner or lienholder tries to claim the home—even years down the road. This is a rare event, but believe it or not, it has happened.
The deed to your home is the legal document that confirms or conveys the ownership rights to a home. It’s typically mailed to you after it’s recorded in the public records office. The deed is the only physical proof that you legally own the home you live in. While most other records will be kept by your mortgage company, closing attorney, and/or title company, they will not have a copy of your deed. It’s mailed directly to you, so they’re not legally required to keep a record of it.