After Home Closing, Which Documents Should Be Kept?
Closing Documents to Keep When Buying a Home
Homebuyers sign an enormous, intimidating pile of documents at closing. The loan paperwork alone can total hundreds of pages or more. Many of these documents are for the lender's benefit. They want to avoid potential future lawsuits.
You might not have room to store all this paperwork after closing, but you really should maintain a completed file. This means collecting copies of all the paperwork was signed during your transaction with the seller, from beginning to end.
Consider keeping these documents for at least a few years after you eventually sell the home you've bought.
You'll want to keep these documents for future reference—for your own review, or in the event that you have to file a legal claim against the seller, your professional representation team, or contractors.
You don't necessarily have to have originals, but you should at least have copies of fully-executed documents with all parties' signatures.
Where to Get Copies?
Your real estate agent should be able to give you copies of the transaction documents because brokers are required to keep a file on each buyer and seller.
But closing documents are typically kept by the closing agent or escrow officer. This paperwork is separate from the paperwork associated with contract negotiations, and it will include financial and legal documents.
The deed and mortgage documents are filed with the county recorder and these become public record. You can always obtain copies of these from the recorder's office or from a title company.
Most documents are digitized in some form, especially those related to the transaction. Your realtor or transaction coordinator can probably offer you a safe download to store many of these documents safely on your computer or on a storage drive.
Your buyer's agent agreement cites all the terms of your relationship with your real estate agent's brokerage, including how long the agreement remains in force and how and when either you or the agent can terminate it.
It's a legal contract, and it can be important to keep on hand so you have proof of the terms you agreed to...even long after the sale closes. Some issues can crop up later.
The purchase agreement is your contract to buy the home, setting forth all the terms and conditions required for closing. It's the document you and the seller signed when you agreed to buy the property, and both parties are legally obligated to abide by its terms.
Documents on the Way to Closing
Addendums, amendments, or riders include anything that alters or amends the terms of your original purchase contract. These types of document might clarify the names on title or the spelling of the seller's or buyer's name. They might correct a street address.
Requests for repair record any monetary agreements or contracts to repair items, and they might be considered addendums to the purchase agreement. A repair addendum specifies the particular type of work to be completed. It could spell out whether the work will require a permit or if it must be performed by a licensed contractor.
Seller disclosures include material facts about things like lead-based paint. They might include a transfer disclosure statement, and other written warranties, guarantees, or disclosures that the seller provides. These documents are often the basis for future lawsuits against sellers when they fail to disclose an issue that becomes apparent later.
Escrow instructions often supersede the purchase contract and spell out the financial terms and conditions of the agreement between buyers and sellers. They authorize an escrow agent to perform specific acts on behalf of the parties involved.
The summary of the home inspector's findings will point out which items are in good condition and which are in need of repair or replacement. It should include photos. It can be a negotiating tool during the sale, and it can later provide a checklist of necessary repairs.
The pest inspection and completion certificate is a report from the inspection company that certifies that the work has been completed. Not every state requires a pest inspection, but others, such as California, require that they be kept on file for two years.
Other inspections and work-related documents could include contractor invoices and permits.
The closing disclosure includes all the final costs for your mortgage, laid out in a manner that you might not understand even though the government tries to make it simple for you. Ask questions about any fees you're uncertain about, and keep the disclosure on hand for tax time. Some of these items are tax-deductible.
The closing statement is the final estimate of all charges and credits for buying the home. This document includes the sale price, your cash to close escrow, your loan amount, and all the other costs paid through escrow to settle the sale, including credits and prorations. This document is also known as the HUD 1 Settlement Statement. The Consumer Financial Protection Bureau replaced it with the closing disclosure in 2015.
The promissory note and mortgage aren't always recorded, and you won't receive the original note until it's paid in full. The mortgage will show your principal balance and the terms of your loan as required by the lender.
Home warranty plans will include the policy number and contact information for repair calls. They'll outline what's covered under the warranty and the types of things that aren't covered.
The insurance policy should cover the terms, conditions, premium notice, and policy number for your homeowner's insurance. The lender will pay your premium upon renewal if your loan is impounded. Otherwise, you're required to pay it annually, but it might be included in your mortgage payment.
The title insurance policy lays out your vesting, the dollar amount of your title insurance, and any exceptions to coverage. It includes the name of the title company, the date of issuance, and the policy number. It can come into play as a defense if anyone asserts a previous lien against your property.
Documents to Keep as Originals
You can obtain a certified copy of these documents from the closing agent or from your real estate agent if you lose the originals.
The closing disclosure contains all the official charges and credits of your home purchase. You'll need this for filing your personal taxes for that calendar year because some items might also be tax-deductible. Give this document to your tax preparer. Your closing statement will probably also be certified by the closer.
The deed is the title transfer document returned by the county recorder's office after it's placed in public records. It's proof that you do indeed own the property. It cites how you hold a title, the name of the sellers who gave you the title, and the property's legal description.
The deed will be mailed to you after recording, and it may well be the only copy. No one else is required to retain it in their records.
At the time of the initial writing of this story, Elizabeth Weintraub, CalBRE #00697006, was a Broker-Associate at Lyon Real Estate in Sacramento, California.
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County of San Mateo. "Clerk-Recorder." Accessed June 11, 2020.
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California Association of Homeowner's Association. "Pest Control." Accessed June 11, 2020.
H&R Block. "Understanding Your Closing Disclosure." Accessed June 11, 2020.
Consumer Financial Protection Bureau. "What Is a HUD-1 Settlement Statement?" Accessed June 11, 2020.
Cuevas, Garcia & Torres, P.A. "Real Estate Law – What Happens When Two Distinct Notes Are Secured by the Same Mortgage?" Accessed June 11, 2020.
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Stewart Title Guaranty Company. "Why Title Insurance." Accessed June 11, 2020.
Stimmel, Stimmel & Roeser. "The Basics of Real Estate Title Deeds." Accessed June 11, 2020.