What To Do With That Mountain Of Home Buying Paperwork

Apr 22, 2019

What To Do With That Mountain Of Home Buying Paperwork Cordon Real EstateWe get two things when purchasing a home – the home itself and mountains of home buying paperwork. The inbound flow of real estate documents usually starts with a Buyer’s Representative Agreement, the document that authorizes our agent to begin searching for our perfect home and to negotiate with sellers on our behalf. From there the paperwork flows like the mighty Mississippi River, sometimes cresting above flood level with multiple updates of our property features checklist, listings of homes to consider viewing, mortgage qualification letters, school district reports and any other information we collect about the community where we intend to buy. And we haven’t even made an offer yet. Before we drown in home buying paperwork, let’s get organized. Here are suggestions for what to do with that mountain of home buying paperwork from the start of our home search to close of escrow.

We’ll start with organizing our paperwork during the house hunting process.

1. Have A Filing Place. We’ll set aside a file drawer, banker’s box (cardboard document storage box) or a plastic bin as a receptacle for all our home buying paperwork. Having a central place to keep everything means we know where to find it.

2. Set Up A Filing System. Sorting documents by subject makes them easier to locate later – which is the point of having a filing system. Having a folder for each subject is an easy way to keep paperwork organized. Here are suggestions for folders that will make your documents easy to find.

  1. REALTOR® Documents. We’ll put our Buyer’s Representative Agreement and other documents that relate specifically to our relationship with our broker here. Keep your property features checklist in here, too (the document that lists features you must have, would like to have, would like not to have, or must not have in your new home).
  2. Mortgage Application Documents. Start collecting mortgage application support documents before pre-qualifying for a mortgage. Your lender should give you a list of the documents they will need, but it’s certain they’ll need the last two months bank statements for accounts where you’re keeping cash for your down payment and closing costs, a month or two of pay stubs to prove income, and the name and contact information for the person at your workplace who is authorized to verify your employment. Keep updating your documents during your house hunt so copies of the latest statements are always in your file.
  3. Mortgage Pre-Qualification/Pre-Approval Letters. Normally you will submit a property-specific pre-approval letter with each purchase offer, so file those with each offer. Use this folder for general pre-qualification information and descriptions of loan types available to you. If you’re shopping several lenders to find the best terms, have a separate folder for each lender.
  4. Community Information. If your home hunt has a specific geographical target, let’s say a town, you may want to collect information about that town in this folder: detailed maps of downtown shopping, bus routes and schedules, school descriptions and ratings, and anything else that draws your interest and could influence purchase decisions.
  5. Listings. Keep all listings in one folder for simplification. If you are looking at a lot of listings and want to divide between those in which your interest is strong, moderate or weak, create a folder for each level.
  6. Offers. When you start making offers, the amount of paperwork to file escalates. Today’s purchase offers can have twenty to thirty pages, including the buyer’s basic purchase agreement, acknowledgements, disclosures and attachments. Seller disclosures to review prior to making an offer can have over 100 pages. Each offer should go in its own folder.

3. Go Digital. Most documents received during the home hunting process will arrive in PDF format, so going digital is easy. You will also very likely sign many documents digitally, which produces PDF documents. If you receive paper documents and don’t have a desktop scanner or all-in-one printer that includes a scanner, but have a smart phone, apps like TurboScan (my preference) work fine for scanning documents. Scanning is as easy as taking a picture and the app can save or email single or multi-page documents as a PDF or JPEG image. Organize digital documents in computer folders as described above for paper folders. And don’t forget to back up your files frequently!

So, you’ve found the perfect home, your offer was accepted and you’re in escrow. The offer folder now contains a signed purchase agreement, disclosures, inspection reports and more. But you will receive other documents that may need to be kept handy after the deal is done. Here are new folders that might be helpful throughout your period of home ownership.

  1. Home And Product Warranties. Sellers often provide a home warranty that covers most systems, e.g. water heater, furnace, air conditioner and major appliances. Warranties still valid for some appliances may transfer to new owners when the appliance is included in the sale.
  2. System And Appliance Operating Manuals. If the seller doesn’t have them, most major manufacturers make operating manuals and parts lists available online. It’s better to collect manuals in a folder when taking possession of the home than to frantically search for them later in an emergency.
  3. Construction Plans and Permits. Very seldom do home sellers have copies of original blueprints, but they should have plans and permits for any remodeling they had done. If they don’t have remodel documentation, ask your agent for help getting a copy from the local building department that deals with such things.
  4. Leases And Transferable Contracts. The best example of a document for this folder is a solar system lease. Leases with years remaining and purchase contracts with payment plans and balances due become the responsibility of the buyer as soon as escrow closes.
  5. Service Contracts. As a courtesy, sellers may provide copies of written agreements they have with service providers the buyer may want to continue using, such as pool maintenance, house cleaning and lawn care.

When escrow is ready to close, buyer and seller are presented with thick packets of documents to sign. Among the documents will be a grant deed that transfers ownership, a deed of trust and mortgage agreement (if applicable), plus a dozen or more other papers. When possible, buyers should ask for a PDF file of all those documents and for hard copies or scans of all the documents they signed after they have signed them. Since scanning that many documents could take time, make the request in advance and be prepared to leave the documents with escrow for a few hours.

When the grant deed and trust deed are recorded at the County Recorder’s Office, a copy with original recording stamp will normally be sent to the buyer. These documents should be added to an escrow documents folder, scanned and kept in a safe place with other home buying paperwork.

Everyone’s purchase is unique, so customize these suggestions to fit your needs. Have questions regarding home buying paperwork or real estate in general? Drop me a line: Contact Us.

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