Keeping records is an integral part of real estate. There are many reasons why you should keep certain documents, and there is no universal number of how long you should retain them. What will depend on your situation is how important these documents are and what they contain.
Some examples of records that most agents keep include: mortgage notes, deeds, notices of lisence, assignments, power of attorney forms, proof of residency or tenancy, proofs of ownership (for cars, boats, etc.), credit card statements, phone bills, receipts, and more.
It depends on both you as a seller and on whether or not you’re running your own show as a buyer who if those items can be found then negotiations may go easier for you. A lot of sellers find it helpful to have their documentation in order since homes often get listed very quickly. This gives buyers time to look through all the materials and determine if this house is really worth their money.
Keep in mind that even though most people recommend keeping copies of these things, only having original documents is still okay. It’s up to you and your personal preference.
The next set of documents you will need are your tax records. These include proof of residency, property ownership documents, and evidence that taxes were paid.
Most people begin keeping real estate records in their own life when they purchase or sell a home. By doing this, they become familiar with how long it takes to update these records.
But as we know, investing in real estate is not just about buying a house! It’s about building a legacy for yourself by creating a stable income stream and wealth accumulation method.
That’s why it’s important to have consistent record-keeping going forward. You don’t want to be left scrambling at the end of the year because you forgot what you put down on paper months ago.
Home inspection report
A home inspection report is also referred to as a property inspection or a professional evaluation of your house. These reports are very specific, looking into everything about the house including its structure, systems (like plumbing), safety features, and whether there are any warning signs of potential major health issues or water damage.
Most inspections last around an hour and include the following items:
A review of the house’s exterior
An examination of the interior space and how it was arranged
A look at all appliances, both inside and outside the room they belong in
Measurements for walls, doors, and other internal structures
A brief discussion with the seller about important things like if they know anything about recent repairs or work done on the house
The inspector will make notes and take pictures throughout the process. The inspector will then prepare their findings in a document which they send to you. This can be via email, fax, or through a website where you can access the documents.
These reports help protect the buyer by giving them information about possible problems or areas of risk within the house. For sellers, these reports can help identify issues that may require attention before the house goes up for sale so buyers can choose to either negotiate or look elsewhere.
A listing agreement is an important document that defines your property’s status, how long you will remain listed for, and who has access to your home’s information.
You should make sure your broker reviews this document before it goes into effect, as he or she may need to update it if, for example, you switch brokers or agents.
The agent representing the house during the sale process can also require their own addendum to this contract. This way, they are clearly defined and understood, which helps prevent any potential conflicts of interest.
It is very common for sellers to include some type of automatic hold period in the listing agreement. This usually covers the time until the house gets shown to buyers, while also giving the other party (the buyer) a chance to review the terms.
This typically runs one to two weeks, so there is not much risk involved here.
Record keeping in the real estate industry is very specific, depending on what stage of business you are in. For example, if you are just starting out as an agent, you will want to keep your records for at least one year!
After that, you can start to get rid of most of them unless you need them for proof of something. This includes documents like contracts, receipts, and electronic messages and conversations.
Most people begin keeping records when they enter the profession, but it is not needed until later. Because of this, many agents don’t maintain their paperwork properly and end up having to re-do things constantly.
This is expensive and time consuming which isn’t ideal given that the real estate market is going through some major changes right now. Luckily, there are ways to organize your records more efficiently so you do not have to worry about wasting money and space too much.
Phone book listing
A phone book listing is typically one or two lines that include your property’s address, number for direct dial, map coordinates, and possibly some other information like whether you are selling during or after tax season.
This additional content usually doesn’t take too long to enter into records. Depending on how much detail you include in your description, it can be done quickly.
After entering your listing into an MLS (more about this later), most agents also have access to make changes such as adding photos and descriptions via their own user accounts.
These features can easily be accessed and changed through their individual interfaces so there is no need to edit directly within the system used to list properties.
Most people have lots of real estate records in their possession. Some keep documents at home, some store them with an agent, and some even hire professionals to maintain their files.
But how long you should retain these records is dependent on your goals. If you are trying to sell your house, then the timing becomes important.
You will want to make sure that your house is listed correctly, that all financials are up-to-date and accurate, and that there are no missing pieces like proof of insurance or disclosures.
And if you do decide to move, you will need to verify that your moving papers are complete and legal. But beyond those basics, it does not matter much.
Most experts agree that three years is enough time to consider deleting any real estate record that you currently own. After that, depending on what type of document it is, you may be able to delete it easily or ask someone else to take responsibility for it.
If however, you still wanted to access this information later, you could always request copies from other sources.
For most individuals, keeping corporate records is not a big deal. But for real estate agents or investors, having thorough documentation of your business can be very important in protecting your investment as well as proving your good standing with regulators.
Most states require that you keep certain documents related to your business for at least three years. Some even make it one year! This includes:
Financial statements such as income reports and tax forms
Bank accounts for your business
Photographs and/or videos of you working for the company
Proof of authority to work (such as licenses)
Because these requirements vary from state to state, we cannot tell you what documents you should keep, but we can give some general guidelines. Before you start organizing all of this information, take a look at our tips here first!
We have also written an article about how to organize business files which may help you get started.
Recording all of your house sale transactions, as well as mortgage records, is important for financial stability.
When you sell a home, you have to report the sales to lenders in order to get credit for the down payment or loan that you use to purchase the new property.
A seller’s personal real estate agent must also be informed of the transaction so they can account for their commission. More importantly, tax implications depend on how quickly you close on the sale!
It’s also important to record mortgages because when you run out of money, most people look to their homes for help. A lien exists on your home from the lender unless it is paid off.
These liens are recorded with local government agencies and show what debt you still owe even if you no longer own the house.
Recording these documents moves away any doubt about whether or not you still owe money and helps protect yourself in the event that someone tries to take ownership of your home.