After Home Closing, Which Documents Should I Keep?
Question: After home closing, which documents should I keep?
Home buyers sign an enormous pile of home closing documents to buy a home. The loan documents, which make up the largest numbers of pages, can total 100 pages or more. It's absolutely insane, and many of those documents are not for the buyer's benefit as much as for the lender (to avoid a potential future lawsuit). You probably do not have room to store all of these documents after closing, as they would eat up substantial storage space. Who keeps paperwork nowadays, anyway?
A reader asks: "After closing the deal on purchasing my new home, what documents should I keep? Should they be originals and certified or are photocopies OK? Currently I have only photocopies of everything, but some of the signatures were not even completed. Should I be worried and start collecting all of my original paperwork such as my owner's policy, deeds, affidavits, etc? I don't know what I might need in the future."
Answer: You should maintain a completed file after closing on your home, which means collecting copies of every document that was signed during your transaction with the seller. You don't really need originals, but you should have fully executed documents with all parties' signatures. You should consider keeping these documents for at least a few years after you eventually sell your home. For some who will never sell, that means indefinitely.
Your real estate agent should be able to give you a copy of the transaction documents because real estate brokers are required to keep a file on each buyer and seller. However, closing documents are typically kept by the closing agent, lawyer or escrow officer. This paperwork is separate from the documents associated with contract negotiations and will include financial and legal documents.
The deed and mortgage documents are filed at the county recorder and become a public record, meaning you can always obtain a copy of those documents from the recorder's office or from a title company.
Closing Documents to Keep After Home Buying
The main reasons to keep the following documents are for future reference -- meaning for your own review -- or in the event you need to file a claim, either against the seller, your professional representation team or contractors. In today's world, most documents are digitized in some form, especially transaction documents.
Your Realtor or transaction coordinator can probably offer you a safe download to store these documents safely on your computer or on a CD.
- Purchase Agreement
Contract to buy the home, which sets forth all the terms and conditions required for closing. This is the document all parties signed when you agreed to buy the home.
- Addendums, Amendments or Riders
Anything that alters or amends the terms of your purchase contract. This type of document could clarify, for example, the names on title or spelling of the seller's or buyer's name or correct a street address.
- Requests for Repair
Any monetary agreements or contracts to repair items. A repair addendum specifies the particular type of work to be completed and could spell out whether the work may require a permit or to be performed by a licensed contractor.
- Seller Disclosures
Includes material facts, lead-based paint, transfer disclosure statement, and any other written warranties, guarantees or disclosures the seller provides. These documents are often the basis for a future lawsuit against the sellers.
- Escrow Instructions, if any
Often supersedes the purchase contract and spells out the terms and conditions of the agreement between buyers and sellers. Authorizes escrow to perform specific acts on behalf of the parties involved.
- Home Inspection
Summary of a home inspector's findings, pointing out which items are in good condition and which are in need of repair or replacement. Should include photos. If this is a digital file, copy it to a CD as a backup in the event your computer should ever lose data.
- Pest Inspection and Completion Certificate
Copy of report from pest inspection company and certification that the work has been completed. In California, for example, pest inspections are on file for two years at the state.
- Other Inspections and Work-Related Documents
Any other inspections or work that was performed. This could include contractor invoices and permits.
- Home Warranty Plans
Includes the policy number and contact information for repair calls. Also outlines what is covered under a home warranty plan and types of things that are not covered. You might be surprised to learn what is NOT covered.
- Closing Disclosure
Includes all of your estimated costs, laid out in a manner that you might not understand, even though the government tries to make it simple for you. Ask questions about fees you do not understand.
- Estimated Closing Statement
The final estimate of all charges and credits for buying the home. This document includes the sales price, your cash to close escrow, your loan amount, and all of the other costs paid through escrow to settle the sale, including credits and prorations.
- Promissory Note and Mortgage
Often, the note is not recorded, and you will not receive the original note until it is paid in full. The mortgage will show your principal balance and terms of your loan as required by the lender.
- Insurance Policy
Terms, conditions, premium notice and policy number for your home owner's insurance. If your loan is impounded, the lender will pay your premium upon renewal. If not, you are required to pay it annually.
- Title Policy
Lays out your vesting, dollar amount of title insurance, and exceptions to coverage. Contains the name of the title company, date of issuance and policy number.
Closing Documents to Keep as Originals After Home Buying
If you lose either of these documents, you can obtain a certified copy from the closing agent or from your real estate agent. For example, I ask my assistant to deliver a second closing statement to all my clients prior to tax time (because they often misplace it).
- Closing Statement
Contains all the official charges and credits of your home purchase. You will need this copy for filing your personal taxes for that calendar year because some items may be tax deductible. Give this document to your tax preparer. Your closing statement will probably also be certified by the closer.
Title transfer document returned by the County Recorder's office after being placed in the public records. Contains how you hold title, the name of the sellers giving you title and the property's legal description. The deed will be mailed to you after recording.
At the time of writing, Elizabeth Weintraub, CalBRE #00697006, is a Broker-Associate at Lyon Real Estate in Sacramento, California.