When you buy a home, you spend an hour or more signing what seems like an endless stack of documents. These documents include your purchasing agreement, a home inspection report, and a host of other legal papers that once signed, make the home yours.
While some of these documents are less important than others, they all serve a purpose in the legal ownership of your new home. Furthermore, they are likely to take up a good portion of your file storage, so you might be tempted to do away with the documents that aren’t as necessary. So, which documents should you keep on hand, just in case? Here’s a list.
1. The Purchase Agreement
This document is legally binding. Both the buyer and the seller must sign it. It contains all the terms and conditions for buying the home including the purchase price, essential rights and conditions, the closing date, and other things both parties have agreed on.
2. Buyer’s Agreement
This is the legal document that outlines the relationship between you and your real estate agent. It describes the duties your agent will provide as well as who will pay their commission (usually the seller).
3. Seller Disclosure
In most states, the law says that sellers must disclose any issues with the home such as pest infestations, renovations made without a permit, asbestos, and lead-based paint. Keeping this document is especially important if something major comes up with your home as the sellers may be responsible under your state’s disclosure regulations.
4. Home Inspection Report
This document outlines the condition of the home at purchase. It depicts any problem areas of the home with photos, so you have an idea of what needs repair and what parts of the home are in good shape when you buy it. This report is usually many pages long, so storing it digitally (in the Cloud) is the best way to save space.
5. Closing Disclosure
The closing disclosure is a document that details everything you need to know about your mortgage. Your mortgage lender draws up these papers and they contain such information as the loan type, the number of years you’ll make payments (15 or 30), whether it’s a fixed or adjustable-rate loan, interest rate, and any costs related to closing and your mortgage. You’ll need this document at tax time to get any deductions related to your mortgage.
6. Homeowner’s Insurance Policy
This document contains the policy number, terms, conditions, and premium notices for your homeowner’s insurance. Be sure to keep this policy updated and on hand in case your home is ever damaged or vandalized.
The documents listed above are just a few of the important papers you’ll sign and receive at closing when you purchase a home. While these papers are some of the more important ones, all the documents you get need to be filed in a safe and easily accessible place. You just never know when you’re going to need them.