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Must Have Documents for Buying or Selling a Home

When it comes to buying or selling a home it can seem as if there is no end to the amount of documentation you must cope with. Even before you actually begin the process of buying or selling; however, there are several crucial documents you must make sure you have on hand in order to speed the process along. Some documents you might expect, but others could be a surprise to you so it's a good idea to get a head start on making sure you have those important pieces of paper on hand.

Pay Stubs

While pay stubs are not a requirement for homeowners looking to sell their home, they are essential if you are in the market to buy a home and plan to finance your purchase with the use of a mortgage. Pay stubs are used by the lender to verify your income and help in determining the price range for your future home. In rare instances, such as in the case of a short sale, sellers may also be required to produce pay stubs. In this case, pay stubs can sometimes be used for demonstrating that an economic hardship exists and justifying the need of a short sale to the bank.

Bank Statements

Buyers obtaining financing for their home purchase should be prepared to provide at least two months' worth of bank account statements. In addition, any seller who is selling their property through a short sale should also be prepared to provide bank statements. Lenders have become increasingly more stringent in their requirements, especially when it comes to documenting income and down payments. For sellers, bank statements can help to establish that a hardship exists for a short sale.

Tax Returns

Once again, any buyer who is trying to finance their mortgage and any seller attempting a short sale will need to provide tax returns. At a minimum, you should expect to provide the last two years of tax returns. Tax returns are necessary to establish that buyers have a stable income over the long-term. For sellers, tax returns can help to further document your financial status if you need to sell short.


Both buyers as well as sellers will need to produce identification, such as a driver license, state ID or passport. The reason is so that lenders and the title insurance company can verify your identity and ensure you have the right to complete the transaction. In most cases you will not need to provide the identification until you are actually at the closing table with a notary, although in some instances your real estate broker or mortgage broker may request your identification earlier.

Divorce Decree

You may need to provide a copy of your divorce decree if you are a buyer that needs to document your unmarried status or if you are a seller that needs to document the terms associated with splitting a property when selling it. The divorce decree can help to establish that you actually have the right to sell a property.

Quitclaim Deed

If you are a buyer that is married, but you are planning to purchase a property as your our own separate property, you will typically need a quitclaim deed. The same is also true if you are a seller that is married who is selling property you own separately or if you are a joint owner that is selling your own separate interests. A quitclaim deed is specifically used for allowing other owners or spouses to sign over their interests in a property to the owner that is selling. As a result, the title insurance company can then provide a guarantee that the title being transferred is clear and undisputed.

Gift Letter

If you are using any type of gift money as part of your down payment, you may need to provide a gift letter so the lender can be certain the funds actually came from a relative and that you didn't obtain a loan that might affect your total debt load.

Mortgage Statement

If you are a seller with a current mortgage, you will likely need to produce a mortgage statement to the title company or escrow holder so they can obtain the necessary payoff requirements from the mortgage holder.

Keep in mind that throughout the process, especially toward the end as the closing of the transaction draws near, you will likely need to provide updated copies of all of your documents, just to ensure that nothing substantial has changed.

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