When it is time to close on the purchase of a house, it may feel as like a never-ending torrent of paperwork is heading your way. This is because there is a lot of paperwork involved in the process. It is not unusual for there to be a total of one hundred pages of documentation associated with the closing process. It is a well-established fact that, for the vast majority of people, their primary property is the single most valuable financial asset in their possession. For this reason, homeowners should make sure they keep important documentation connected to the closing of the property. What are some things that need to be stored in the archive once the agony from writer’s cramp has subsided? The items on the following list are considered necessities and should not be thrown away.
Documentation relating to the search for a new place to call home
If you use an agent, she will keep copies of your agency agreement; nevertheless, you should save a paper copy as well as a digitised version on an external drive with other closing papers. If you work with an agent, she will keep copies of your agency agreement. If you collaborate with an agent, she will preserve copies of the agency agreement between the two of you. Take sure to save both the digital file that was given to you to DocuSign online as well as a paper copy of the papers if the broker brought them to you to sign electronically. This is especially important if the documents were handed to you to sign electronically.
Congratulations! You are a part of the agreement that was made!
Keep a copy of the Contract as well as the Offer to Purchase that you and the seller have agreed upon. This document will include the purchase price, the amounts of the earnest money and option money, the way in which you have decided to share the closing fees, the repairs that you and the seller have negotiated, as well as a great deal of other information. Always make sure to keep a copy of this agreement, as well as any addendums or riders that pertain to it. You are required to save a physical copy of these documents as well as the digital signatures that were placed on them when they were DocuSigned online.
Regarding the residence and the condition in which it is now found.
The disclosure form that sellers are required to fill out and sign in many states describes the condition of the property and requires the sellers to identify every repair and faulty condition that they are aware the property currently has or has had in the past. In addition, the sellers are required to sign the form. This covers a wide range of potential issues, some of which include things like damage caused by water, the existence of wood-eating insects, asbestos, or paint containing lead, amongst other potential issues. In the event if you discover problems in the future that are not addressed in the report, you might make use of this form. In the event that this occurs, you can use it to determine whether or not the vendor is responsible for difficulties of this nature.
Once the disclosure document has been completed by the sellers, you should then have a qualified home inspector go over the property. Put a copy of the inspection report with the other documents relating to the closing, where it can be easily found. You will need to save paperwork in the event that the sales contract is altered to contain a clause requiring the seller to perform a repair. This is because, in the event that the repair is subsequently deemed to be insufficient, you will be required to prove that the repair was made.
It is imperative that you not only keep the house warranty if it was provided by the seller and study it as soon as possible to determine whether or not you need to register the guarantee within a certain amount of time after the closing. If the seller did provide the warranty, it is imperative that you not only save the warranty but also study it as soon as possible.
Documents concerning the mortgage, the closing, and the transfer of ownership to the property
When you sign a contract to purchase a home, either your real estate agent or the title company should promptly give you with an estimate of the closing costs in the form of a document known as the Closing Disclosure. This should not take too much time after you have signed the contract (CD). You are required to have the final version of the CD in your possession no later than three business days before the transaction is finalised. Make sure that you keep both a digital copy and an original copy of it with the other documents that you need to sign in order to complete the transaction.
Always keep in mind that you need to make copies of any and all of the documents that are necessary for the process of applying for a mortgage. Your mortgage lender is required to provide you with a good faith estimate of the expenses connected with the loan as well as the terms of the loan before the loan is finalised. You could get an estimate at the beginning of the application process, much as you did when you were applying for the CD, and then you might get the final paperwork later on. It is really necessary for you to keep hold of these.
After the completion of the transaction, you should make it a point to save a copy of the promissory note that you sign for your own records. Maintain a copy of both your homeowner’s insurance policy and the declarations page for the duration of the time that your policy is in effect.
You are required to save copies of both of the title insurance policies that are involved in the closing process when you purchase a piece of real estate, and you should make sure to do so. One of the policies is one that is provided by the seller to the buyer, informing them that the title company has conducted an exhaustive investigation of the property records and has found no known encumbrances on the property in the form of liens, breaches of property lines, or other problems. This policy is one of the policies that is provided by the seller. You are obligated to hand over the second title insurance policy to the mortgage company in order to protect the company’s interest in the piece of real estate you are purchasing in the event that you are unable to keep up with the payments on the loan in the foreseeable future.
Both the buyer and the seller must put their signatures on the property deed in order for the ownership of the property to be legally transferred from the seller to the buyer. You won’t have to worry about losing this deed since it will be returned to you once it has been recorded at the county register’s office. It is imperative that the first copy be kept safe. If you wish to buy the property with the help of a mortgage, you will be needed to sign a deed of trust before the transaction can be finalised. This document attests to the fact that a trustee will continue to hold the actual deed of the property in the name of the mortgage lender until the loan is paid off in full. Additionally, make sure that you save this piece of paper.
Those final pieces of documents should be found somewhere in this immediate area.
You must save all of this paperwork associated with the closing for as long as you own the house, and you must maintain the digital versions of these documents on both your computer and a separate drive. Because the closing statement can have an effect on your income taxes, you should keep a copy of it for at least a few years after the sale of the property has been completed.
Other parties should have copies of these closure papers in their possession in the event that something occurred that caused you to lose both the digital and physical copies of any of these closure documents. Both the buyer’s agreement and the purchase contract will be in the ownership of your agent. Both of these documents will be in your agent’s control. The title company will save the purchase contract, the title policies, and any other papers that are pertinent to the transaction. The mortgage company that you are working with will keep a record of everything that is necessary for your financing and the deed of trust. The county clerk’s office will also be given a copy of the trust deed so that it may be retained as an official record there.