How Much Paperwork to Buy a House?

Zillow

Man signing paperwork
The more things change, the more things stay the same. This popular adage is definitely not true when it comes to the amount of paperwork involved in buying a home!

To understand how things have changed, we need to compare the past to the present. Luckily my father is very organized and has his entire file of documents from when he bought the family house almost 45 years ago in Virginia. More recently, when he made what he calls his “final” property purchase, he couldn’t believe the stack of paperwork involved in the purchase.

Here’s a comparison of the amount of paperwork involved with a home purchase “then” and “now,” along with brief descriptions of the voluminous stack of documents you’ll encounter the next time you buy real estate.

Purchase contract

Then (1 page): In 1969 the purchase contract was a full page long and covered all the material issues related to buying the property, with no other disclosures, reports or documents related to the transaction.

Now (200 pages): The 2012 purchase contract was 10 pages, plus approximately 200 more pages of contract addendums, disclosure reports from the seller and agent(s), third-party disclosure information, plus federal, state and local disclosures, disclaimers, questionnaires, certifications, escrow instructions, inspections, advisories, verifications, counteroffers, receipts for reports and notices.

Mortgage loan

Then (4 pages): Three-page deed of trust/mortgage note and one-page settlement sheet.

Now (100-125 pages): 13-page deed of trust, five-page promissory note, 50-70 pages of lender disclosures, 3-10 pages of federally required HUD-1 statement and good faith estimate, and other paperwork required as documentation for the loan.

Title insurance

Then (5 pages): Chicago Title cover page plus five total pages of the title abstract, survey, schedule of exclusions and general exclusions pages.

Now (15-20 pages): The title abstract, title insurance policy, exclusions, plat/survey and general information.

Property insurance

Then (unsure): Unfortunately his insurance policy document was not in the file, but his annual policy coverage premium — $25.06 — was noted on the settlement sheet. But this payment might have covered more or fewer perils than a policy covers today, so that annual amount probably is not comparable to a modern-day policy.

Now (30-40 pages): A standard homeowners policy covers the dwelling, liability and medical, and has pages and pages of items that are excluded from coverage.

HOA documentation

Then: His property was not in a homeowners association, so no documentation in his file. This item is included as a reference point for current buyers whose properties are in common interest developments (HOAs).

Now (200-300 pages): Covenants, conditions and restrictions (CC&Rs), bylaws, board of directors meeting notes, financial statements, budgets, disclosures, reserve studies and more.

As you can see, the current-day acquisition of a property really entails 300 to 600 pages of documentation that goes along with a purchase. This number of pages can vary widely depending on the state, the type of property and the complexity of the issues related to a particular dwelling.

Unfortunately, most people review little, if any, of the paperwork related to their purchase — they just sign whatever is presented to them. All buyers would be much better off and would significantly reduce the risk of something going wrong by educating themselves and doing a detailed review of every page of every document that pertains to their purchase. Yes, this takes extensive time, energy and effort, but real estate has a lot of risks and issues, and you should work hard to protect yourself on every property you buy.

Related:

Leonard Baron, MBA, is America’s Real Estate Professor®. His unbiased, neutral and inexpensive “Real Estate Ownership, Investment and Due Diligence 101” textbook teaches real estate owners how to make smart and safe purchase decisions.

Note: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinion or position of Zillow.

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