Understanding the Statement of Adjustments in a Real Estate Closing
If you’re buying or selling a home, you may have heard the term “Statement of Adjustments” mentioned during the closing process.
But what exactly is it? How do you find out the final amount you’ll need to pay or receive on closing day?
This guide breaks down what a Statement of Adjustments is, who prepares it, and why it’s such an important part of every real estate transaction.
Disclaimer: This article is for general informational purposes only and does not constitute legal or financial advice.
What is a Statement of Adjustments?
A Statement of Adjustments is a key document prepared for the closing of a real estate transaction. It acts like a financial balance sheet between the buyer and the seller, showing how much money is owed, what’s been paid, and how recurring costs (like taxes or utilities) are divided as of the adjustment date — the date agreed upon in the purchase and sale contract.
In simple terms, it ensures both parties pay their fair share of expenses up to (and after) the adjustment date.
What is the adjustment date?
The adjustment date is the day used to calculate how expenses are divided between buyer and seller.
It’s usually the same as the possession or closing date, but not always — it’s negotiated and confirmed in the purchase agreement.
For example, if property taxes are prepaid for the full year, the buyer reimburses the seller for the portion of taxes covering the period after the adjustment date.
Who prepares the Statement of Adjustments?
The seller’s lawyer or notary typically prepares the Statement of Adjustments.
They have access to the necessary financial details such as property taxes, utilities, and prepaid expenses.
The buyer’s lawyer then reviews the statement to confirm accuracy before closing.
What information does it include?
A Statement of Adjustments summarizes all financial items between the buyer and seller, such as:
- Purchase price
- Deposit(s) paid by the buyer
- Property taxes (prorated to the adjustment date)
- Utilities like water, gas, or electricity
- Condo or strata fees
- Rent or other income, if the property is tenanted
- Any other prepaid or outstanding amounts
The final line of the statement shows the balance due on closing — the amount the buyer must pay (or the seller will receive) to complete the transaction.
Does my realtor get a copy?
Usually, no. The Statement of Adjustments is exchanged between the lawyers or notaries handling the closing.
Your realtor may help explain how adjustments work, but they typically don’t receive a copy of the final document unless you request it be shared.
Will I see a copy of the Statement of Adjustments?
Yes. Your lawyer or notary will provide you with a copy or review it with you before closing.
It’s important to understand each item on the statement so you know exactly what you owe or will receive on closing day.
Have Questions About Buying or Selling?
Buying or selling a home can feel complex — but you don’t have to navigate it alone.
Our team of North and West Vancouver real estate experts would be pleased to answer your questions about the purchase or sale process, closing steps, or local market trends.
Contact us today to start a conversation about your next move.