[Editor’s Note: The views expressed here are solely those of Ross Kaplan, and do not represent Edina Realty, Berkshire Hathaway, or any other entity referenced. If you need legal advice, please consult an attorney.]

Clients may not know, but their Realtors do (or should):  what the statute of limitations is for bringing an action, post-closing, on a residential real estate sale (at least in Minnesota, where I’m licensed).

In fact, there are two, different deadlines:  1) two years for claims between Buyers and Sellers; and 2) six years for claims between clients and their agents (technically, their broker).

Ergo, good record keeping practices would seem to dictate that agents store their files — either paper or electronically — for a minimum of six years.

File Retention

Ahhh, but if you’re a busy agent, that requirement can create some serious space and record keeping demands.

If you handle +15 deals a year, that comes to almost 100(!) transactions over a six-year period.

Now, consider that, between Purchase Agreements, Listing and Representation contracts, handwritten notes, etc., each file may contain hundreds of pages.

How do you pare that down?

Avoiding Trouble

The short answer, I suppose, is “keep your nose clean” — that is, never do anything as an agent that would give a client cause to sue you.

In over 15 years of selling real estate, I’m happy to report that I never have.

But, being a dutiful former lawyer, I still believe in practicing good record keeping “hygiene.”

Fortunately, there are some documents that can be tossed as soon as a transaction has closed.

Moot and/or Superseded

As a listing agent (representing Sellers), that includes any records relating to the Buyer’s financing, including their Pre-Approval Letter and Written Statement.

After all, if the sale closed . . . the lender must have wired the money!

Meanwhile, as a Buyer’s agent, once a sale has closed, I see no reason to keep copies of all the other homes I may have shown my client.

Finally, once a home has changed hands a second time — for example, the Buyer who purchased your client’s home has themselves sold the home — the need to retain documents drops dramatically.

P.S.: When, post-closing, the Buyer commences a tear-down or major remodel, any Seller representations (or lack therof) about the home’s condition also become moot.

About the author

Ross Kaplan has 19+ years experience selling real estate all over the Twin Cities. He is also a 12-time consecutive "Super Real Estate Agent," as determined by Mpls. - St. Paul Magazine and Twin Cities Business Magazine. Prior to becoming a Realtor, Ross was an attorney (corporate law), CPA, and entrepreneur. He holds an economics degree from Stanford.

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