8 Real Estate Documents to Keep—and What Happens If You Don’t

1. Buyer’s agent agreement

When you choose a real estate agent, you sign a buyer’s agent agreement—a contract between you and the brokerage, stating that the agent represents you in the purchase of your home.

This agreement outlines the terms of the relationship with your agent—including who pays the agent’s commission (in most cases, the seller), the length of the agreement (90 to 120 days is standard in most markets), and the terms for terminating the agreement.

2. Purchase agreement

Every home sale starts with a real estate purchase agreement—a legally binding contract signed by home buyers and sellers that confirms that they agree to a certain purchase price, closing date, and other terms.

3. Addenda, amendments, or riders

These types of documents alter or amend the terms of your purchase contract. For example, if a survey reveals that there’s an encroaching fence built by a neighbor, and you’d like the fence removed, the sales contract has to be formally amended.

4. Seller disclosures

Sellers are required by law to disclose certain problems with the home, both present, and past, that they’re aware of that could affect its value. While laws vary by state, these disclosures might include lead-based paint, pest infestations, and renovations done without a permit.

5. Home inspection report

After your home inspection, your inspector should produce a report with detailed notes on the condition of the home and any potential problems.

6. Closing disclosure

Mortgage lenders must provide borrowers with a closing disclosure (also called a CD) at least three business days before settlement. This document spells out things such as your loan term (typically 15 or 30 years), loan type (a fixed-rate or adjustable-rate mortgage), the interest rate, and closing costs, among other financials.

7. Title insurance policy

Title insurance offers protection against any competing claims to a home. As part of the process, the insurer will run a title search of public records, seeking loose ends such as liens against the property or fraudulent signatures on ownership documents.

8. Property deed

When you take the title and become the sole owner of the property, you’ll receive a deed—a legal document that confirms or conveys the ownership rights to the home.

Typically, the property deed is mailed to you after the title transfer documents are recorded in your county’s public records office.

Why you should keep it: Presenting a property deed is the only way to show someone you legally own the home you’re residing in. Because the deed is sent to you directly, neither your mortgage lender nor title company is required to keep a copy of it.

6 Ways to Totally Snoop the House You Want to Buy

1. Soak in the Bathroom

Homebuyers tend to peer into the bathroom for as long as they’d want a stranger to examine theirs: not long at all. But this isn’t the time to be quick. Josh Myler, a REALTOR® with The Agency in Los Angeles, encourages buyers to take a long, close perusal of the water closet.

Flush the toilet to find any backups in the system, and turn on the faucets to check the water pressure. Besides being annoying during showers, low pressure can indicate problems with the plumbing.

“Water pressure can really cause headaches down the line if you don’t dig in before you make an offer,” says Myler.

But always, always check with your agent first. In some markets, or with some sellers, it’s considered impolite to actually use the toilet.

Or, if the owners already have moved, the water may be turned off. And that could be, awkward.

2. Dig Around in the Closets

OK, don’t actually go through the owner’s stuff, but take a close look to assess how much storage space there is, and decide if it’ll meet your needs.

“People don’t like to open closets because they think it’s rude, but if you’re buying the house, it’s one of the biggest investments,” says Myler. “You want to make sure there’s enough room for everything you need.”

Before you step foot in a single house, take inventory of your current storage space, and know how much you’d like your next home to have.

3. Poke Around the Attic and Basement

Don’t just stick your head inside and call it good. Give the basement and attic a thorough investigation. If there are belongings piled against the wall, request they be moved before a second viewing.

“I get very nervous when I see a packed basement and stuff against the wall,” says Kyle Alfriend, lead agent of The Alfriend Group in Dublin, Ohio.

That’s because hidden walls and ceilings can conceal water damage, including peeling or discolored paint, rotting wooden accents, or a white, chalky substance on the wall, which indicates water intrusion.

As for the attic, a quick glance should tell you what you need to know. Are there rat droppings? Molding wood? Or is it generally clean, even if dusty? BYO flashlight for an enlightened examination.

4. Meet the Neighbors

Sorry, introverts. There’s no better way to get a read on the neighborhood than by directly asking the actual neighbors. Pop by their home and strike up a chat.

It’s a twofer not only might you get valuable information about the area — from the noisy bar on the street behind you — but paying attention to their attitude speaks volumes about your potential relationship with your maybe-neighbors. Do they seem excited to meet you? Or are they standoffish?

“It’s not what they answer, but how they answer that will be very illuminating,” says Myler.

5. Be an Amateur Investigator

Anything seems fishy? Take your suspicions to city hall. If there are additions, pull the permits or get help from your buyer’s agent. You certainly don’t want to be responsible for tearing out that beautiful porch because the previous owners didn’t comply with the law.

Also, check the certificate of occupancy and any easements — especially if you’re hoping to make any major changes. Both are public record. An easement simply gives someone the right to use property they don’t own. Often that other someone is your local government that needs it for public services, such as water.

Myler remembers a friend who purchased a home with the goal of building a pool, only to find out an easement for the sewer line cut directly through the middle of the yard.

Another common use is a shared driveway, such as when one homeowner has to pass through another homeowner’s property to reach their home.

6. Ask Questions

If your sleuthing finds something concerning, don’t panic.

“Many times, there’s stuff that, at first glance, is really scary,” says Alfriend. “Often people will write off a house without digging into it, but there’s usually a perfectly logical, understandable reason, and it’s not a problem.”

Say you find a gaping hole in the drywall. It might be a huge red flag — or they might have rambunctious kids they absolutely plan to clean up after.

“Boys can wrestle and put a foot through the thing, and it’s 30 minutes before a showing,” Alfriend says. There’s not much the sellers can do at that point.

With any problem, your first step is simple: Ask.

8 Rules To Negotiate An Offer

Here’s the dream: Your offer is perfect, you don’t need to negotiate, and you can spend the next few weeks addressing more pressing home-ownership questions, like “Why is it called wainscoting?” and “Do I want a new coat in blush or emerald green?”

And it could happen. Many sellers accept the best offer they receive, and for a variety of reasons.But sellers are also known to reject offers for a variety of reasons. Or make counteroffers. This is especially likely if you bid low, or when you’re up against multiple competing offers.

If you do receive a counteroffer, it’s up to you to decide whether you want to accept the new contract, negotiate the terms, or walk away. In cases such as these, look to your agent. He or she is your spirit guide. If you decide you want to negotiate — that is, make a counteroffer to the seller’s counteroffer — your agent will use their negotiating skills to help get you the best deal. This is what agents do every day.

But you’re not just going to sit there. If you understand what negotiating tactics your agent may deploy — they depend on the local market and your position — you can back them up. And cheer them on. Here are eight rules every buyer should know before they — and their agent — start negotiating:

#1 Act Fast — Like, Now

When you receive a counteroffer, you should respond quickly — ideally within 24 hours. The longer you wait, the more space you leave for another buyer to swoop in and nab the property. Also? If a seller senses hesitation, they may decide to withdraw their counteroffer before you even have a chance to respond.

#2 Raise Your Price (Within Reason)

While you obviously don’t want to overpay for a house, you may have to up the ante — especially if you initially made a lowball offer. Lean on your agent’s expertise to determine how much money you should add to the Got an Offer Strategy?Before you make an offer, talk to your agent about how high you’re willing to go if the seller doesn’t accept your bid.sales price to make it more enticing to the seller.

Then, through their powers of persuasion, your agent can make the counteroffer look even more attractive by pointing out similarly priced “comps” — recently sold homes in your area that are comparable in terms of square footage and features.

As your agent negotiates, it can feel like things are escalating quickly. It’s stressful. You may feel a sudden urge to do whatever it takes to win.

Before you go overboard, there are two things you must keep in mind:

1. You can’t exceed the monetary confines of the pre-approved mortgage you received from your lender.
2. You shouldn’t overextend your budget.

Because your counteroffer has to be an amount you’re comfortable spending on a home. You want that new house and to keep living your life. Plus: You’re not out of options yet.

#3 Increase Your Earnest Money Deposit

Increasing your earnest money deposit (EMD) — the sum of money you put down to prove to the seller you’re serious (i.e., “earnest”) about buying the house — is another way to show the seller you have more skin in the game. A standard EMD is typically 1% to 3% of the sales price of the home. Making a counteroffer with a 3% to 4% deposit could be what you need to persuade the seller to side with you

#4 Demonstrate Patience About Taking Possession

Depending on the seller’s timetable, changing your proposed possession date — the date you take over the property — could butter them up, too. If the seller wants to stay in the home for a few days after closing, try offering a later possession date. You could also draw up a “rent-back” agreement, meaning the seller pays you rent for staying in the home for a set period of time after the closing date.

#5 Let Go of a Few Contingencies — With Care

Want to give your counteroffer an even bigger boost?

Reduce the number of contingencies you’re asking for. It’s your way of saying, “Hey, look, I have fewer ways to back out,” which gives the seller more reassurance that the deal will close.

But be selective: Some contingencies are too important to give up. A home-inspection contingency — the right to have a home inspection and request repairs — gives you an out if you spot major problems with the home (and protects you from buying a total money pit).

You might waive a termite inspection if you’re in a state where the risk is lower.

But ultimately, waiving contingencies depends on your market, your loan program requirements, your risk tolerance, and the circumstances of the house in question. And if you waive contingencies and then you find a problem, the seller isn’t responsible for fixing it.

#6 Ask for Fewer Concessions

At a mortgage settlement, home buyers have to pay closing costs for taxes, lender’s fees, and title company fees. Closing costs vary by location, but you can expect to shell out between 3% and 4% of the home’s sales price. The seller pays an additional 1% to 3%. (Smart Asset and Nerdwallet have simple calculators you can use to get a rough idea of what your closing costs might be.)

When making an initial offer, you have the option to ask the seller for concessions — a settlement paid in cash to help you offset your share of the closing costs. (This move is less feasible if you’re going up against multiple offers.)

Concessions effectively lower the seller’s net proceeds from the sale. Making a counteroffer that removes the concessions you would have otherwise received at settlement puts cash back in the seller’s pocket — and can improve your bid.

#7 Pick Up the Cost of the Home Warranty

Sometimes sellers offer prospective buyers a home warranty. This is a plan that covers the cost of repairing major home appliances and systems, like the air conditioner or hot water heater if they break down within a certain period (typically a year after closing).

A basic home warranty costs about $300 to $600 a year, according to Angie’s List. If it seems like waiving the home warranty can sweeten negotiations, but you still want the peace of mind of having one, tell the seller they don’t need to cover it — then buy it yourself.

Just keep in mind, whether you or the seller buy the warranty, you’ll need to pay the service fee (typically between $50 and $100) if something does, indeed, need to be repaired while under warranty.

Also, FYI: A home warranty is entirely separate from homeowners insurance. Homeowners insurance — the security blanket that covers your home’s structure and possessions in the event of a fire, storm, flood, or other accident — is required if you take out a mortgage. It can cost anywhere from $300 to $1,000 per year.

#8 Know When to Walk

When negotiating with a seller, trust your gut — and your agent. If he or she says a deal is bad for you: Listen.

And if you don’t want to make any more trade-offs — and the seller won’t budge — it’s smart to walk. That can be a tough decision to make, and rightfully so! Negotiating is tough. It’s draining.

And losing something you’ve worked hard to get can be disappointing. But don’t worry. There’s a better deal for you out there. And after those strong feelings of frustration pass, you’ll realize: Now I know how to do this.