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11 Documents You Will Need After You Buy a House
If this is your first home buying experience, you better start stretching your writing hand now: You are about to sign more documents than you ever have in your life. In fact, the entire endeavor to own property takes place in a blizzard of paperwork that feels never-ending. Even when closing day finally arrives, you’ll be saddled with yet more documents requiring review and signature. Yet, at no point in this process does anyone stop to tell you what’s important to keep and what you can leave behind in your old, property-less life.
Throughout the process – but especially on closing day – you will receive documents that you should store in a secure, organized location, like a safe or an encrypted computer file. This guide will help you determine which documents you absolutely need to keep around for future use.
Purchase Agreement
The purchase agreement is the first document you are likely to sign. This outlines the terms and conditions required for closing, such as clean inspections and appropriate appraisals. It ensures that neither party can back out of the arrangement unless there are unforeseen circumstances; it is as important to you, the buyer, as it is to the sellers.
Escrow Instructions
Often, escrow instructions supersede purchase agreements. This document typically contains similar terms and conditions for closing, but it also includes authorization for escrow to act on behalf of the buyer or seller. You should keep this document to understand escrow’s powers and your obligations going forward.
Repair Requests
After inspections, you might request the seller make critical repairs to the property. These could evolve into monetary agreements – like deductions from your offered price – or contracts for repair added onto the purchase agreement. You should keep these to ensure any work is done and that it is done correctly, i.e. with permits and licensed contractors.
Seller Disclosures
Around the time of inspections, the seller should submit a disclosure of all information known about the home. For example, sellers must inform buyers about the materials used in construction, the presence of lead-based paint or other hazards, existing warranties on appliances, and more. It is incredibly crucial that you retain this document because it could form the basis for a future lawsuit against the sellers if they failed to disclose a dangerous feature of the home.
Home Inspections
Your home inspector will scour your property to provide you with intimate details in the inspection summary. Typically, the inspector will sort features of the property into three categories: in good condition, needs repair and requires immediate attention. As long as there aren’t too many items in the latter two categories, you should feel confident purchasing the house. Then, the summary can be a guide for you or your contractors to improve the property after you own it.
Home Warranty Plans
A buyer’s home warranty is similar to home insurance in that it protects you from unexpected costs due to malfunctions and disasters, but typically a warranty covers the stuff that insurance doesn’t bother with, like appliances and HVAC systems. Often, sellers will provide one year of home warranty to buyers to show good faith; you should keep and review this document to see if you need additional coverage or want to extend coverage after that year is up.
Closing Disclosure
When it finally comes close to closing, you will receive a document that details all estimated costs. The government requires the bank to produce a document that is easy to understand – but it rarely is. You should hold onto this document, so you can ask questions about it before you need to pay.
Insurance Policy
Before a lender will provide you with a loan, they need to know their investment is insured. You should keep a hardcopy of your insurance policy, so you have handy access to the terms, conditions, premium, and policy number.
Title Policy
The title company researches your property and determines whether the property is subject to any liens – basically whether anyone besides the sellers can claim ownership of your soon-to-be home. Title insurance protects you from these claims, should they arise, and the title policy explains costs and coverage.
10. Closing Statement
The closing statement contains lists of the charges and credits of your home purchase. You will undoubtedly use this document again when you next do taxes; you will be able to deduct some of the closing expenses.
11. Deed
Perhaps the most important document of all, the deed is the document that details the official transfer of the property to your ownership. Fortunately, this is one document you don’t have to sign. Instead, it gets mailed to you after you close.
