How to make a home binder

A home binder is one place for the papers that say what you own, what you paid, what’s covered and what’s been done. Gather them once, keep a second copy away from the house, and add to it every time someone works on the place.

Why keep one

When we moved in, my own house papers were scattered everywhere. Email, a drawer, the closing binder, photos on my phone.

If you’ve ever kept a spreadsheet for the house, a folder of receipts or a maintenance log, you already do this. A binder puts it in one place, ready for three days: tax time after you sell, the day you file an insurance claim, and the day someone else takes over the house.

What goes in it

Closing papers. The CFPB says to “Save the whole stack or electronic file” and to make sure you have four documents: the Closing Disclosure, the promissory note, the mortgage (also called the security instrument or deed of trust), and the deed (CFPB, After closing). Add the owner’s title policy, which the CFPB says “can protect you if someone later sues and says they have a claim against the home from before you purchased it” (CFPB), and the survey if you got one.

Insurance. The policy, starting with its declarations page. The NAIC, the national group of state insurance regulators, says to “Keep your policy in a safe place and know the name of your insurer,” and to file the policy with letters, “premium payment receipts, notes of conversations and any claims submitted” (NAIC, A Consumer’s Guide to Home Insurance, 2022). It also says to make a home inventory: “Go through each room; write down and take pictures or videos of everything in the room.”

Receipts for improvements. When you sell, the IRS figures your gain by subtracting your adjusted basis from the amount you realize (IRS Publication 523, Selling Your Home). Improvements raise your basis, and a higher basis means a smaller gain. Publication 523 says improvements “add to the value of your home, prolong its useful life, or adapt it to new uses.” Its examples include a new roof, a furnace, a water heater, insulation and a deck. Painting, fixing leaks and filling cracks don’t count on their own, though repairs done as part of an extensive remodel can (Publication 523). Some closing costs you paid when you bought count too, though not financing costs and some others Publication 523 lists, and “The settlement statement should list the fees related to buying the home.”

If you meet the conditions, you “may exclude the first $250,000 of gain,” or $500,000 for a married couple filing jointly (Publication 523). Whether you’re under that line depends on your sale price and your basis, and the receipts are how you show the basis.

Warranties and manuals. The FTC says to “Save a copy of the warranty” and to “Save your product receipt with the warranty,” because “The receipt proves the date you bought the product and that you’re the original product owner” (FTC, Warranties). Some warranties need a registration card returned first, so keep the confirmation too. For a new home or a remodel, a builder warranty “covers items that are typically a permanent part of the home,” with workmanship and materials on most parts usually covered for the first year, and heating, plumbing and electrical generally for two (FTC, Warranties for New Homes).

Warranties and insurance do different jobs. The NAIC: “A homeowners policy isn’t a maintenance contract.” It “doesn’t pay to repair items that simply wear out.”

Permits and reports. Building permits with their final sign-offs, the inspection report with its photos, any radon, sewer or roof reports. For most homes built before 1978, federal law requires a seller to “Provide all available records and reports on the presence of lead-based paint and lead-based paint hazards” (EPA, Real estate disclosures about potential lead hazards).

Where things are. Ready.gov says to “Find the shut-off valve for the main water line that enters your house and tag it for easy identification.” For gas, procedures differ by meter, “so it’s important to call your gas company” (Ready.gov, Safety skills). It also warns: “If you turn off the gas for any reason, only a qualified professional can turn it back on.” Write down where the water main, gas shut-off and electrical panel are, with a photo of the panel’s labels.

Service history. One line per visit: the date, what was done, who did it, what it cost, and the invoice behind it.

The small facts. Paint colors by room, furnace filter size, the bulbs each fixture takes, the sprinkler zones, who to call for what.

How long to keep what

“Generally, keep records relating to property until the period of limitations expires for the year in which you dispose of the property” (IRS, How long should I keep records?). For a home, Publication 523 says to keep basis records “until 3 years after the due date for your tax return for the year in which you sold your home.”

In practice: closing papers and improvement receipts stay as long as you own the house, then three more years past that return’s due date. A warranty stays as long as it runs. The insurance file stays at least while the policy or a claim is open. A tax professional can tell you what applies to you.

Paper, digital, or both

Both. FEMA’s Emergency Financial First Aid Kit says to store “paper and electronic copies of all files in safe locations,” and to consider keeping paper copies “in a fireproof and waterproof box or safe, in a bank safe deposit box, or with a trusted friend or relative” (FEMA, Emergency Financial First Aid Kit, FEMA P-2034, September 2019, page 7). Electronic copies go “in a password-protected format” on a drive in that box, or with “a secure offsite storage service.” Ready.gov adds “the cloud” to the list (Ready.gov, Financial preparedness).

Paper needs no account and no battery. Digital can be searched, and a copy online survives a fire at home. The NAIC says the same for your inventory: “at another location, such as your workplace, a safe deposit box, a relative’s house or online.”

Some papers can be replaced and some can’t. The CFPB says your deed is “filed as a public record,” so a copy exists outside your house. Your receipts and photos exist only where you put them. Scan those first.

Using a safe deposit box? FEMA suggests checking who can open it if the owner dies or is too ill to.

What the next owner will want

When we bought our house, the seller handed over binders that told its whole history. I didn’t yet know how valuable that would be.

A good binder answers the questions that come up before an offer: how old the roof is, who did the electrical work and whether it had a permit, what the furnace has needed, which warranties still run. The FTC says the receipt proves the date you bought the product and that you’re “the original product owner.” Note on each warranty whether it transfers.

Leave the binder in the house when you go. Keep your own copy of the basis records, because you still need them for your taxes.

Start this weekend

1. Get a binder with tabs, or a folder on your computer with the same tabs: Closing, Insurance, Improvements, Warranties, Permits and reports, Service, House facts.
2. Pull the closing stack. Find the four documents the CFPB names.
3. Search your email for “receipt,” “invoice,” “warranty” and “policy.” Save each one into its tab.
4. Walk the house with your phone. Photograph the water main, the gas shut-off, the electrical panel’s labels, and every appliance’s model label for the warranty tab.
5. Do the home inventory the NAIC describes, room by room.
6. Start the service log with the last three things anyone fixed.
7. Put a second copy somewhere that isn’t your house.

I’m building Homaic to keep these same papers with the house, as they came.