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When it comes to buying or selling a home, there is an overwhelming amount of paperwork to handle, but which documents are important to keep? While your agent, title company, and mortgage lender (if applicable) collect and monitor the bulk of the paperwork, there are important documents for you to keep at home in a fire-safe box or a bank safety deposit box.
Buyer agent agreement
If you are the purchaser, you will choose a real estate agent and sign a buyer’s agent agreement. This document is a contract between you and the brokerage, stating the agent represents your interests in purchasing your home.
The contract outlines the terms of the relationship with your agent, including agent commission (most often the seller), length of the agreement (typically 90 to 120 days), and the terms for agreement termination.
After the house transaction closes, the contract records the services your agent agreed to provide, which can be referenced if there is a post-sale issue.
The sale of every home starts with the real estate purchase agreement. This document is a legally binding contract signed by the buyer and seller confirming they agree upon a purchase price, closing date, and other terms.
Provisions in this contract need to be precisely followed. If the buyer or seller fails to fulfill the contract terms, legal ramifications may ensue.
Amendments, addenda, or riders
These add-on documents alter or amend the purchase contract agreement. For example, if a survey reveals a fence is encroaching on your property built by a neighbor, and you want it removed, you must amend the sales contract.
Amendments, addenda, or riders often relate to appraisals or home inspections because they change the original terms of the signed contract. Suppose both parties sign a repair addendum where the seller agrees to make a repair based on the home inspection. The document is a reference if you find issues with the repairs.
By law, a seller must disclose specific past and present problems that can affect the home’s value. State laws vary, but disclosures might include pest infestations, lead-based paint, and renovations without proper permitting.
These disclosures by the seller can be the basis of a future lawsuit if significant problems present themselves after you move in. Without the paperwork, holding the seller accountable in court can be problematic.
Home inspection report
Post home inspection, you receive a report detailing the condition of the home and any potential problems. This document provides a highly detailed account of everything the home inspector finds, including photos of problem areas. By keeping the report, you have a record of any repairs the property may require in the future.
Mortgage lenders provide borrowers with a closing disclosure (CD) at a minimum of three days before settlement. This document addresses the terms of your loan (usually 15 or 30 years), the loan type, whether fixed-rate or adjustable-rate mortgage, the interest rate, and closing costs, among other financials.
The closing disclosure paperwork is the financial itemized list of all costs associated with closing and your mortgage. This document is crucial for future reference as you will need it when you file your taxes and want to take deductions for things like mortgage points.
Title insurance policy
This policy type offers protection against any competing claims to a home. The insurer will run a title search of public records looking for title anomalies like liens against the property or fraudulent signatures on ownership documents.
By keeping this document, if another party, such as a previous owner, wants to claim the property, your title is insured. There are separate title insurances to cover lenders and buyers. It is wise to get a policy for yourself and a copy of the lender’s policy.
You will receive a deed when you take the title and become the sole owner of the property. This legal document confirms or conveys ownership rights of the home to you. The deed is a physical document with the signatures of both the buyer and seller and is usually mailed to you after title transfer documents become a record in your county’s public records office.
Be sure that your identification (usually a driver’s license) reflects your legal name on all of your paperwork. It is not uncommon for a newlywed or divorcee to encounter issues with legal names.
Your real estate attorney can confirm the importance of retaining these listed documents and any other information they may deem relevant to your purchase or sale. Depending on your record-keeping methods, you may opt to keep other recommended paperwork after buying or selling a home. However, these vital documents reviewed above are a must for your records.