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Several decades ago, all the terms and conditions of a residential purchase agreement could fit easily onto one piece of paper. Now we're drowning in paperwork. Unfortunately, this excessive proliferation of paper has led many buyers to pay little attention to it. It's overwhelming, often incomprehensible, so why bother?
Some say we are heading toward the paperless real estate transaction. If so, we have a long way to go. In the meantime, it's wise to face reality and pay close attention to the documents related to your home sale or purchase.
There are a few rules to remember in regards to the paperwork. First, you should receive a copy of every document you sign during the course of your real estate transaction. If your real estate agent, or loan agent, fails to give you a copy of a document you've signed, be sure to ask for it. Also make sure you understand what you're signing. If you don't, ask your real estate agent or attorney for an explanation.
Many real estate agents employ transaction coordinators to help with paperwork. Some agents offer to provide you with a nicely organized copy of all the documents pertaining to the transaction when your deal closes. This is a nice service. However, don't wait until closing to receive copies of pertinent documents. Make sure you receive copies of documents at the time they're signed.
Real estate agreements need to be in writing in order to be enforceable. So if you enter into verbal negotiations during the course of your transaction, make sure to follow up and have any agreements you reach put in to writing. If you have a dispute, the written agreement signed by both buyer and seller may be your only defense.
HOUSE HUNTING TIP:
You will receive documents, a few at a time, throughout your transaction. It's a good idea to set up a transaction file so that you can store all of these in one place. In addition, you should keep important transaction documents even after the transaction closes. These documents will be necessary if you should have an after-closing dispute with the other party. Also, if you are a buyer, some of these documents may prove useful later when you sell the property.
At the least you should keep copies of the complete purchase agreement (including any modifications), disclosure documents, inspection reports, title report, policy of title insurance, and work-related invoices and permits, if there are any.
If you are buying a home, make sure you receive a copy of the recorded deed that transferred title to the property from the seller to you. In some locations, you might not receive the deed when you close the transaction. For example, in California, the deed is recorded at the county recorder's office on closing day. The deed is sent to you later.
Regardless of how or when you receive the deed, be sure to take a look at it before you file it away. One buyer failed to do this and later discovered a mistake.
The buyer had purchased a home from a seller who had relocation benefits. The relocation company bought the property from seller and was to have deeded ownership interest to the buyer. But, instead of deeding from the seller to the relocation company and then to the buyer, the property was deeded from the seller to the buyer and then to the relocation company.
THE CLOSING:
This sort of mistake doesn't happen often. But, if you pay attention to the paperwork, you can catch a mistake and have it corrected.
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