What documents should you hold onto once you sell your home?

Question

I've sold a few properties and I don't know if I should hold onto the title insurance, closing papers, etc.

Answer 1

If selling created a "taxable" event you definitely want to keep any papers as to you cost (original and improvements) and sales expenses. I believe the IRS can go back up to five years, but check with a tax pro.

Answer 2

Personally I would hold on to it all.
Who knows if in 10 years they might find that there was an issue with taxes or the title and you may need to prove you had title insurance.
Definitely safe deposit the title insurance docs, the mortgage instrument release, the closing statements, etc.
Always better safe than sorry.
Sometimes your lawyer will keep this on file as well.
I'd check with them to see what they keep and maybe it will allow you to cut down some of your document piles.
Then again the only way to be sure is to do it yourself.

Answer 3

create a file and maintain every piece of paper in regards to the sale of the house. Your HUD 1 is very important as it list every penny you spent getting into the house. At tax time take it to your accountant for your tax deductions.