Know what’s in your stash of papers — and how to store them all for safekeeping.
Congrats! You’ve bought a home. You walk away from the closing table in triumph, a pile of documents in your arms. OK, so what are the key documents, how do you keep them, and when will you need them? Let’s look over the documents.
Buyer-Agent Agreement? Check.
When you hired your agent, you forged an agreement so you’d have a representative to help you find and buy your new home. This agreement with your agent sets forth the terms of your relationship, including how long the agreement exists between you. It spells out whether your agent served as your exclusive representative, whether the seller was paying the agent’s commission, and what cancellation terms you had.
Hold onto this document through and after closing, until after its term of days runs out, and when you are sure you have no issues with your agent’s role in your purchase. (If your agent was fabulous, leave a good online review! It will help the next hopeful home buyer, and it’s the best thank-you note you can give.)
Purchase Agreement? Check.
Did the seller accept your offer? Your agent will give you a purchase agreement — your contract for the deal. It identifies, and is signed by, the seller and buyer. It includes the sale price, closing date, and terms surrounding the sale. When you signed it, you put your earnest money into escrow. The title company transferred that deposit to the seller when all conditions and contingencies of the agreement were met… and the deal went through!
The escrow instructions, addenda and riders may reflect concessions made between the parties, amending the terms of your agreement. If, for example, the inspection found obsolete or unsafe electrical outlets, and the seller agreed to replace them before you took the keys, your agent may have formally modified your agreement with an addendum describing the work, and any need for a permit or a licensed and insured contractor. Discussions on repairs might work as addenda, so hold onto your communications. Request and keep copies of permits and invoices. You might need them if it turns out that something has not been done properly and as specified in your agreement.
Inspection Report? Check.
The home inspection report is a keeper. Why?
- It helps you decide whether to buy this particular home — because your purchase agreement is likely contingent on the home’s physical condition. If the inspection report comes back with unacceptable problems, the inspection contingency provision in your purchase agreement permits you to withdraw from the deal.
- If you want to buy the home despite a few issues, the report helps you and your real estate agent decide what work the seller should perform before closing, or if the price should come down.
- The inspection report serves as a checklist to guide the work that will later be needed on the key systems and features in your new home: plumbing, vents, heating and cooling, and so forth. This, in turn, helps you memorialize the maintenance and repairs you’ve done when, one day in the future, you transfer this home to its next owner.
For all these reasons, as a buyer, you should be familiar with the inspection report, use it in negotiations with the seller, and refer to it as you preserve the value of the home for years to come.
Pro tip: If you buy a home with a septic system, get a septic testing report done in addition to your standard inspection, so the seller will need to handle repairs under the inspection contingency.
Appraiser’s Report? Check.
An appraiser sizes up the home in detail, inside and out, and does research on the recent sale prices for comparable homes in the same area. You’ll likely get an electronic copy of the report you can save forever. You’ll be able to refer to the photos of the main features of value, descriptions of the condition of each feature, and any issues the appraiser might spot.
If your purchase agreement contains an appraisal contingency, you need not go through with the purchase if the home’s appraisal value is substantially less than your agreed-upon price. If the appraisal turns out as expected, place a copy on a flash drive and keep the copy with other important home documents. Referring to it will help you keep track of the property value, and future upgrades and repairs.
Pro tip: Never throw away home improvement receipts. Take before-and-after photos. Documentation of the extent and cost of an upgrade or appliance can come in handy later, to show added value should you later decide to sell your home.
Warranty and Insurance? Check.
Your seller might have covered a home warranty plan as part of your negotiations. It identifies your policy number and the number to call for repairs, as well as what’s covered, if you’ll need to make a co-pay, and so forth. Keep it with your homeowner’s insurance policy and make sure your insurance is on automatic debit so your coverage never lapses. If you ever need a copy of your policy, simply ask your insurance agent to send you a portable document file (PDF).
Along with this documentation, hold on to your title insurance policy. It states your choice of vesting and coverage details, and may be needed if anyone claims an existing interest in, or a lien against, your home.
Here we must differentiate between the lender’s title insurance policy and an owner’s policy. The latter protects the buyer in case there are undiscovered clouds on the title. The federal government urges buyers to get their own policies, in order to guard against the risk of having to clear their titles from encumbrances ordinary title searches can miss. Titles can have everything from small errors to deed fraud or forgery in the chain of title.
Keep your insurance policy documents at least as long as you own the home. You might have a future need to find your agent’s contact information, your account number, and the details of your coverage.
Note: If you buy your primary residence in Iowa, up to $500,000 in home value is protected by Iowa Title Guaranty for you already at no extra charge. Nice perk, Iowa! Check your rates [PDF] here if your Iowa home costs more than $500,000.
Real Estate Disclosure Statement? Check.
Sellers must disclose information about the home’s history that might impact its fair value. Real estate disclosure statements tell you about renovations done without permits, repairs needing to be done, planned development around the home, any history of property line disputes, lead paint, liens on the property, and so on. State and county laws on required disclosures vary. California has especially strict disclosure standards and documents, and also requires a pest inspection.
Buyers must sign off on all disclosures and reports. If disclosures contain any dealbreakers, the buyer may withdraw from the deal. Sellers who are on the ball will save everyone that anguish and just let buyers know everything they need to know up front. If major problems crop up with your home after you move in, you’ll need these disclosures in order to take action against the seller for any failures to notify. Save them for at least ten years after your home purchase.
Important: Unapproved repairs and renovations may be dangerous, and may subject sellers to legal responsibility.
Mortgage and Closing Documents? Check.
Your mortgage (or deed of trust, depending on the common practice in your state) represents the lender’s interest in your property. You keep the promissory note — your promise to pay back a mortgage loan according to its terms. The lender has filed your mortgage lien with the county in which your home exists, and your title company also kept a copy.
At closing, you’ll receive a statement that tallies up all charges, refunds, and credits related to the home sale, escrow account, and mortgage. Your mortgage company prepared your closing disclosure (CD), which breaks down your mortgage and closing costs, three business days or more before closing. Keep all this paperwork throughout the life of the loan. If you ever need certified copies, contact your closing agent. Here again, if you make your loan payments every month by automatic debit, you’ll keep your payment record in great shape, and have no need to collect paper statements. All account information is online, at your loan servicer’s website.
Pro tip: When making your first annual tax return appointment with your accountant or tax preparer after your purchase, ask what to bring to the office. You will need your annual mortgage statement, and possibly certain closing documents (such as documentation of points you paid at closing) and receipts for any home repairs, energy-efficient upgrades, or medically necessary accommodations.
Your deed is the written, signed legal instrument that represents the title transfer from seller to buyer, and proves you own your home! It shows how your property ownership is vested, and sets forth the full and accurate legal description. After you buy your house, the county will record the deed and send it to you. Keep the original in a portable safe, as discussed below. Your house deed is one of the most important documents you have.
If you need to retrieve your deed and cannot find it, some counties make property records available online. You can also get a copy of your house deed through this site. Deeds.com can pull the most recent deed for most properties within minutes.
Documents Down the Road: After Your Mortgage Payoff
Paid off your mortgage? Again, congrats! It’s time to call your county recorder’s office to see that the mortgage has been released and your house is lien-free. Depending on the state’s rules, your lender may mail you your original promissory note, marked PAID, and you’ll receive a certificate of satisfaction (release). Hold on to these documents.
Next on the list? Update your homeowner’s insurance to remove the lender from the policy, and show your name as homeowner and your bank account as the payment source. Be sure you’re now paying property tax if your lender was previously paying it out of your escrow account.
Storing Important Documents
Don’t sweat if you’re not immediately organized. It’s OK that you got home from closing and stashed everything in a drawer — as long as everything’s together, and easy to locate. But do mark your calendar and take a day to organize and protect your key paperwork.
Hurricanes, coastal floods, and fires in recent years might have you wondering about portability as well as safekeeping for your documents. There are briefcase-sized, portable, fire-resistant safes perfect for storing your most important papers, including documents with original signatures or certified copies. Consider shopping for a fire-resistant, locking briefcase — this can be found by doing an online search for the phrase — and using it for the critical documents, such as the deed to your home.
Replaceable papers can go into sheet protectors in a dedicated file drawer: the purchase agreement, mortgage paperwork, closing documents and receipts. Back these documents up by getting a scanner app and placing them on a flash drive as well as keeping a secure, cloud-based backup. Store documents in a place away from the kitchen, and accessible if you are quickly leaving the house. What about a safety deposit box? If you’re concerned about theft, that might be your answer; just keep in mind these boxes can defeat your purpose if no one knows or recalls where the box or key is after you pass away.
And There You Have the Basics.
Even if you’ve owned your home a while, it’s a good idea to take stock of what you’ve stashed away, and be sure it’s digitally copied, organized, and securely stored. We hope this checklist helps make that important task a little easier for you.
Photo credit: Claudio Schwarz via Unsplash.