Triangle Area Real Estate News & Information

When you buy or sell a home, you have to review, initial and sign many documents. So many that it can feel a bit overwhelming. So when the sale is final and you start to move in (or out), there is a huge temptation to throw all those documents away. That would be a big mistake, because you never know what problems or issues might arise in the future. To avoid those headaches, it’s important to understand what the closing documents are for, and how long you should keep them.

Here is a basic guide to help you:

Keep These Documents When Buying A Home

When you close on a home, you’ll get a mortgage agreement, various addendums and disclosures, the deed and the settlement statement, among other documents. Some documents you’ll get right away, and others, like the title insurance, may come weeks later in the mail.

It’s always a good idea to keep all important closing documents safe and secure for at least a few years after closing. Some may be obtained from your Realtor or lawyer should you need them, but the safest way is to keep them yourself.

Here are some things you need to know about the closing documents and why they're important to keep on hand:

• The Purchase Agreement details the terms of the home sale, contains any amendments or addendums related to it, and is signed by the buyer and seller.
• The Truth-in-Lending (TIL) Disclosure Statement outlines all the payments that will be made on the loan, including due dates and amounts, and it will confirm the interest rate.
• The Mortgage Agreement states all the terms of the mortgage and the obligations both you and the lender have. It will also tell you about what happens in the event you fail to honor these terms.
• Your inspectors will provide Inspection Reports, which may include home, radon, pest, and water, to name a few. The could also include other documents signed by you and the owner concerning the cost of repairs or compensation made instead of repairs.
• The Bill of Sale is for any other non-fixed objects that may be included in the sale. It may include objects such as appliances, a swingset, rugs, curtains, etc. Some states use these others list these items separately on the Purchase Agreement.
• The Affidavit of Title and ALTA Statement is signed by the seller verifying that no other document or agreement has been entered into which might cause problems concerning the title. It could include other liens, contracts, or leases. Both parties will sign the ALTA statement which completes the request for title insurance.

What Documents To Keep When You Sell Your Home

While it’s important to hold onto documents after buying a home, it’s just as important after you sell it. In addition to the documents listed above, there are other documents that you, as the seller, should retain for a few years after the sale is complete:

• A copy of the deed
• The title insurance policy
• All sales documents that have been signed by you and the seller, as well as any related documents, such as amendments and addendums

Generally, it’s always a good idea to keep important documents. They make take up space in your desk drawer, but they will save you from potential problems later.