Important home-buying documents you should keep

November 3, 2021 by PEMCO Insurance

More than a few trees give up their lives when someone buys a home – and we're not just talking about the timbers holding up its roof and walls. There's a blizzard of paperwork involved in any real-estate transaction. We recommend you keep both electronic records (scans or photographs stored securely on a USB drive or in the cloud) and an old-school paper binder as backup. The backup is important in case you're unable to provide password access that your spouse or heirs would need.

Chances are, you'll only need to refer to them for taxes and when it's time to sell. But they're also important if you run into problems after the sale, ranging from a misunderstanding with your broker to a defect in the property.

Couple reviewing documents.Once you've moved in, here's (at least some of) what to hang onto:

Documents related to the sale

A lot of paperwork gets lumped under the category of "closing documents." You'll want to keep those as long as you own the home, and maybe even for a few years longer. While this isn't an all-inclusive list, it includes some documents filed as part of your county's public records, and your real estate agent may be able to provide you with a download of many of them:

  • Buyer's agent agreement, which spells out the services your agent has agreed to provide and who pays the commission.
  • Purchase agreement, which shows the price, closing date and other terms.
  • Amendments to the purchase agreement. This might include changes to the contract like requirements for the seller to fix defects found during your home inspection.
  • Seller disclosures about known defects. If, unfortunately, the seller has downplayed a problem that you later want to address through legal channels, this shows what was made known to you.
  • Home inspection. Even if you're not looking to the seller to remedy issues, you'll at least have a point-in-time record of what the inspector found.
  • Property deed. You'll get this in the mail after title transfer documents are recorded by the county. It shows you've become the owner of the property. (Down the road, when you pay off your loan, you'll receive additional release/certificate of satisfaction documents showing you own the home outright.)

Tax and insurance documents

  • Closing disclosure. Your accountant will want to take a look at this because it summarizes details of your loan, including costs that qualify for tax deductions.
  • Title insurance. This verifies that no one else has a lien interest in the property.
  • Home warranty. New homes, in particular, often come with warranties covering things like appliances and roofing.
  • Homeowners insurance. With PEMCO, you always can view a copy of your policy online by logging in to your account.

Additional documents you'll need when you eventually sell

  • Receipts for improvements. If you live in your home for a long time, it may be worth substantially more when you sell it than it was when you bought it. If it's increased in value enough, you could be subject to federal capital gains taxes. If you can show what you paid for improvements (like the bill from a remodeling contractor) while you owned it, you'll reduce the amount of potential tax liability.

    And while we're on the subject of receipts, we're also a big fan of keeping receipts as part of your personal property inventory. While it won't affect anything when you go to sell, your inventory is tremendously helpful if you ever need to file an insurance claim and is an important part of your home ownership documentation.
  • Permits. This is important to show future buyers that work done after you bought the home complies with local building codes and has undergone any necessary inspections. Undocumented remodeling found during an inspection can derail a sale, and noncompliant work may need to be redone.

    Real-estate documents are just some of the important records you should keep. Here's a list of what to hang onto, for how long and where they should be stored.

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