When you buy a home, it may feel like you’ve killed a small forest in the process because of all the paperwork you must read and sign. If you’re trying to organize your important papers and keep clutter to a minimum, recycling unneeded paperwork is a good first step; however, there are some documents from your home purchase that you should keep. We’ve listed these below from most important to least important.
1. Property Deed
This is the most important document from the sale of your home, because it clearly states you own the property. You’ll typically receive it in the mail shortly after the sale is recorded at the county office. While a copy is scanned and added to a digital database, you should keep a physical copy in case anything should happen.
2. Title Insurance Policy
When you purchase a home, you’ll also purchase title insurance. This protects you in case someone comes along and tries to make a claim against the property after you’ve purchased it – like estranged family members, lien holders, previous owners, etc. It also helps any future buyers of your home who can usually get a reissue rate from the title insurance company, because the company doesn’t have to do as much upfront research.
3. Closing Documents
Keep copies of all the documents you signed at the closing table. These are binding legal documents that list the final terms for your purchase, and include: the mortgage note, escrow statement, deed of trust, closing disclosure, settlement statement, etc. You may need them to verify inconsistencies and file taxes, and they’re not very easy to come by after closing.
4. Offer to Purchase and Addendums
The offer to purchase, addendums, and amendments you sign should be kept for future reference. The offer states the terms of purchase that you and the sellers agreed upon and has your signatures attesting to that fact. Any addendums attached to the offer, as well as amendments signed afterwards, alter or add on to the original terms. All these forms can be used to protect your interests if an issue arises, like learning a repair on the home wasn’t properly completed as agreed upon before closing.
5. Seller’s Property Disclosure and Mineral, Oil, and Gas Rights Disclosure
When the property was listed by the seller, they should have filled out 1) a residential property disclosure stating any known defects with the home, as well as the year any major renovations were made, and 2) a mineral, oil, and gas rights disclosure stating who, if anyone, has severed rights to these substances if found on the property. Both forms should be kept in case it comes to light that you were misinformed about the history of the property.
6. Property Survey
We always recommend that our clients have a survey completed of the property in order to identify the lot lines, easements, and encroachments. If you want to add a building or fence to the property, you’ll need to know exactly where you can and cannot build, especially with setback restrictions. You’ll also want to know if your neighbor has built a fence or other structure on your property. It’s important to keep the survey as proof of how your lot sits. If you ever decide to sell, buyers often ask for this, so they can see if the property meets their needs, as well as to verify exactly what they are placing an offer on.
7. Home Inspection
If you had an inspection on the home (we hope you did!), the report is very handy for planning improvement projects and acting as a reference point for future issues that may pop up. We recommend keeping it, at least for a few years. The same goes for any additional inspections you may have – termite, chimney, pool, etc.
8. Buyer Agreement
When you hire a real estate agent to help you make your purchase, you sign a buyer agency agreement. This states the agent’s role, commission, length of service, and terms for terminating. You don’t need to keep this agreement for as long as the other documents – maybe a year or as long as the length of service is dated.
Once you sell your home, you no longer need to keep most of the papers mentioned above; however, it’s a good idea to keep financial records for 6 years. The Internal Revenue Service can audit your taxes for up to 6 years if they feel there’s been a large understatement of income. Of course, other factors can determine when the IRS can complete an audit, but 6 years is standard. If you’re hesitant to let things go, scan and upload them to a secure cloud storage. That way, they aren’t taking up space.
If you’re thinking about buying or selling a home in the Wilmington area, give us a call at (910) 202-2546 or send us a message. We’re happy to discuss your options, so you can make an informed decision.
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