What does the Statement of Adjustments include?

It typically includes the purchase price, the deposit credit, and prorated property taxes, condo or maintenance fees, and sometimes utilities or fuel, ending with the balance due on closing.

Why are property taxes adjusted at closing?

Because taxes are billed for a full period, the statement splits them at the closing date so the buyer and seller each pay only for the part of the year they own the home.

Who prepares the Statement of Adjustments?

The lawyers handle it, usually the seller's lawyer drafting and the buyer's lawyer reviewing, in the days before closing so the final balance is confirmed and funds can be arranged.

Mortgage Glossary

What is Statement of Adjustments?

A Statement of Adjustments is a closing document, prepared by the lawyers, that prorates and reconciles shared costs between buyer and seller as of the closing date. It accounts for items like property taxes, condo fees, and utilities so each side pays only for their period of ownership. It shows the final balance the buyer owes on closing.

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Quick answer

Also known as: adjustments statement

Key points

The Statement of Adjustments reconciles shared costs as of the closing date.
It prorates property taxes, condo fees, and similar recurring charges.
The deposit already paid is credited on the statement.
It shows the final balance the buyer must bring to closing.
Lawyers prepare and review it in the days before closing.

Statement of Adjustments explained

The Statement of Adjustments lays out, line by line, the credits and debits that adjust the purchase price on closing. It starts with the sale price, subtracts the deposit already paid, and then prorates recurring costs the seller may have prepaid or owes, such as property taxes, condo or maintenance fees, and sometimes fuel or utilities.

For example, if the seller has prepaid property taxes for the whole year, the buyer reimburses the portion covering the time after closing; if taxes are unpaid, the seller credits the buyer for their share. The bottom line is the balance due on closing, the amount the buyer's lawyer must collect, combined with the mortgage advance, to pay the seller in full.

What a Statement of Adjustments is for

The Statement of Adjustments exists to divide shared, time-based costs fairly so neither party pays for a period they did not own the home. It ensures property taxes, condo fees, and similar charges are split precisely at the closing date and reflected in the final amount the buyer brings to the deal.

How it can help you

Reviewing the Statement of Adjustments helps you understand exactly how much cash you need to close, beyond the down payment and obvious costs. Surprises here can strain your budget. Lenderoo shops 40+ lenders for free, so your mortgage is settled early and you can focus on confirming the adjustments with your lawyer before closing day.

When it comes up

The Statement of Adjustments comes up in the final days before closing, when your lawyer prepares it and reviews it with you. You confirm the prorated property taxes, any condo fee adjustments, and the deposit credit, then arrange to transfer the exact balance due so the transaction can complete on time.

Example: Prorating property tax

Suppose you buy a home for $500,000 and the seller has prepaid the full year's property tax of $3,650, or $10 a day. You close exactly halfway through the year, so 182 days remain that you will own the home.

The Statement of Adjustments credits the seller about $1,820 (182 days at $10) because they prepaid taxes covering your ownership period. After subtracting your $25,000 deposit and adding this adjustment, the statement shows the precise balance you must bring to closing.