Your closing company is required by law to keep a record of your closing documents, but it still is smart for you to keep important real estate forms on hand as well. Of the hundreds of documents that you’ll encounter during the home-buying process, Realtor.com says these are some you should be sure to keep and why.
Purchase agreement
Every home sale begins with a real estate purchase agreement. This legally binding contract signed by home buyers and sellers confirms an agreed-upon purchase price, closing date and other terms. The provisions stated in this contract must be followed to the letter. If you or the seller fails to fulfill these duties, there could be legal ramifications.
Addenda, amendments or riders
These types of documents alter or amend the terms of your purchase contract. For example, if a survey reveals that there’s an encroaching fence built by a neighbor, and you’d like the fence removed, the sales contract must be formally amended. Addenda, amendments, and riders often are related to home inspections or appraisals, and because they change the original terms of the signed contract, they’re worth holding onto. For instance, if both parties signed a repair addendum, where the seller agreed to make certain repairs based on the home inspection, you’ll need this addendum if you find issues with the repairs down the road.
Seller disclosures
Sellers are required by law to disclose both present and past problems with the home that they’re aware of that could affect its value. Although laws vary by state, these disclosures might include lead-based paint, pest infestations and renovations completed without a permit. If major problems arise with your home after you move in, these disclosures can be the basis for a future lawsuit against the seller. If you lose them, you might have trouble holding the seller accountable in a court of law.
Home inspection report
After your home inspection, your inspector should produce a report with detailed notes on the condition of the home and any potential problems. This document is an extremely detailed list of everything that the home inspector finds, and it typically includes photos of problem areas. By keeping this report, you’ll have a record of any repairs that you may need to make to the property in the future.
Closing disclosure
Mortgage lenders must provide borrowers with a closing disclosure at least three business days before settlement. This document spells out items such as your loan term (typically 15 or 30 years), loan type (a fixed-rate or adjustable-rate mortgage), the interest rate and closing costs, among other financials. The closing disclosure is an itemized list of all the costs associated with closing and your mortgage, and it’s important to have for future reference. It also is the document you’ll need when filing your taxes since you can take deductions for things such as mortgage points.
Title insurance policy
Title insurance offers protection against any competing claims to a home. As part of the process, the insurer will run a title search of public records, seeking loose ends such as liens against the property or fraudulent signatures on ownership documents. You’ll need this document in case another party, such as a previous owner, tries to claim the property. Note: There is separate title insurance to cover lenders versus buyers, and you would do well to obtain a policy for yourself.
Property deed
When you take the title and become the sole owner of the property, you’ll receive a deed. This legal document confirms or conveys the ownership rights to the home, and it must be signed by both the buyer and the seller. The property deed usually is mailed to you after the title transfer documents are recorded in your county’s public records office. Presenting a property deed is the only way to show someone you legally own the home. Because the deed is sent to you directly, neither your mortgage lender or title company is required to keep a copy of it.
