In order to separate fact from fiction, let’s answer a few common myths about the closing process and exactly what documents you need to keep – and which ones can be found for you in today’s electronic and digital age.
There are a few documents needed to sell a house. The exact files needed to vary by state, but below is a list of a few standard documents.
Title: Most states require documents proving ownership of the home. For example: the title, deed, and any surveys of the property.
Financing: Documents showing the mortgage and financing information.
Contract: The original sales contract including the price.
Taxes: Tax records showing real estate and school taxes. Improvements: Receipts for any repairs and upgrades made to the house, or receipts for items included in the home sale (refrigerator, washer, dryer, etc.)
HOA: If your area has a Homeowner’s Association (HOA), include any documents and information about the HOA.
Many sellers ask the question, “Do I need title deeds to sell my house?” Yes, you’ll need the title and deed in order to transfer ownership of the home to the buyer.
This brings us to the first of 3 myths regarding what documents you need to sell a house…
This simply isn’t true thanks to the electronic world we live in today. Every property in each county has a copy of the property deed on file. The county often uses the deed and information in each file for calculating taxes each year.
The law requires the county to keep digital copies on file for every property in the county. You can obtain a new copy of the deed by requesting one from your county registrar.
However, it’s not required that a homeowner brings their deed to any closing.
Sellers do not need the original copy of a deed to sell a house since the county will have this information. However, errors happen, and it’s best if you can keep a hard copy of your deed in case any electronic information is ever lost or corrupted.
When a property is going to be closed, the title company contacts the county and receives a certified copy of the deed as part of the closing procedures.
A “title” is just a simple way to say that you own the rights to something (meaning you have rights to your house and can use it as you see fit). Titles can be either full or partial ownership. On the other hand, a deed is a legal document that transfers ownership from one person to another.
The title company pulls a digital and certified copy of the home deed for closing. However, the same can’t be said about payoff letters or property liens that have been filed. The mortgage company, not the title company, usually handles this.
Quite often mortgage companies forget to complete this step. As a result, the title company needs to hunt this information down. This can significantly impact your ability to sell a property or delay closing. Deeds and payoff letters are often filed electronically. However, keeping physical documentation on liens or payoff letters helps expedite a quick sale.
When you are selling a property, many people assume they need to pay the property taxes for the year prior to closing. The truth is that the title company will pay taxes at closing from the proceeds of the property sale.
Many counties process taxes slowly. Paying the taxes in full in advance may cause delays while the title company verifies the correct amount owed.
If you have more questions about real estate documents needed for selling your home, We Teach Houses can help answer them.