The transaction has closed! The sellers are eager to get on with their move. The buyers want to start unpacking. But when the handshakes are over, everyone will leave with a daunting stack of paperwork. How much of it needs to be retained, and what role should the agent play in ensuring the right documents are kept?
“It’s important to me that clients understand the importance of their closing documents,” said veteran agent Lynne Eliopoulos at ERA Key Realty Services in Framingham, Mass. “I’m happy to provide clarification as needed, and I encourage my clients to keep all the paperwork in a safe, secure place, because much of it will be needed for tax purposes or when and if they ever wish to sell.”
While some of the paperwork may vary from state to state, much of the closing documentation is standard in all cases. What are the documents buyers and sellers should file away for future reference?
- Closing Disclosure/ALTA Settlement Statement– Itemizes all loan fees, points, hazard insurance, commissions, title insurance fees and other buyer costs associated with the closing. The Closing Disclosure also summarizes the terms of the mortgage loan, including the annual percentage rate and rescission period.
- Deed of Trust and Note – Spells out the legal terms of the mortgage obligation and the agreed-upon repayment terms
- Deed – Transfers ownership to the buyer (the original deed is retained)
- Affidavits – Binding statements by either party – such as an affidavit signed by the seller stating they have not incurred any liens
- Riders – Any amendments and/or addendums to the sales contract changing and/or adding to original terms
- Insurance Policies – These provide a record and proof of coverage
- Disclosure/Inspection Data – Copies of seller’s disclosures, records of home and pest inspection and proof of any repair work done
- Seller Closing Disclosure/ALTA Settlement Statement -– Itemizes all seller costs including the payoff of all seller encumbrances/liens against the property
- Owners Title Policy – Evidences your right to sell the property
- Deed –Transfers title to the buyer upon closing (a copy is retained)
- Mechanic’s Lien Waivers – Provides assurance that an unpaid contractor will not place a lien on the property for pre-closing work
- Bill of Sale – Documents any personal property items you are selling along with the real property, such as a barbecue grill, furnishings or light fixtures
Contact your title agent for more information on how you can keep your clients informed, even post-closing.