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All You Need To Know About The Statements Of Adjustments

The most crucial document in real estate transactions is the Statement of Adjustments. People outside the real estate sector do not possess knowledge about such agreements. We will provide you with an overview of the Statement of Adjustments and help you understand how they work.

Statement of adjustments explained

When you sign a real estate purchase agreement, you are giving your nod to the purchase and sale of a property on a specific day at a particular time. There are other obligations on it but the timing of selling and purchasing is the key. The purchase price does not take the seller’s property outstanding property rates into consideration. It also does not mention whether the homeowner’s association encumbrances have been prepaid or are outstanding. It is crucial to know about all these factors before purchasing a property. No one wants the seller’s financial obligations.

It is where the Statement of Adjustments comes in. The law makes sure that the buyer won’t have to bear the burden of the seller’s obligations. A good property lawyer investigates all clauses in the contract that are needed to be adjusted. The timed adjustments are estimated by adding the purchase price with the prepaid sum of sellers. Then we subtract the costs that the seller is responsible for but only till a specific date from that sum. These are called timed because they consider the time at which these obligations change from seller to buyer.

You must be thinking about the Statement of Adjustments. Well, it is just like a credit card or bank statement. The purchase price can be called a starting balance and the bottom figure is like the ending balance on your bank statement. It contains credit associated with both buyer and seller. Each credit to the seller for prepaid sums and each credit to the buyer for unpaid sums are added to or subtracted from the main price. It is known as Adjusted Purchase price.

The adjusted purchase price is the amount that has to be paid to the seller on a specific date, agreed upon, for everyone to pay for their responsibilities.

Principles you should follow

The first principle you should remember is that all unpaid fees and taxes go with the property. The outstanding rates and debt gets transferred to the new owner.

The second principle is that all the council rates and outstanding amounts must be paid completely. You should start calculating the daily rate of property rates ad taxes to know for how many days a party is owning a property.

The third principle is that you should be fully focused on understanding adjusted statements. You cannot afford a misunderstanding on it.

There are many Commercial Property Leasing Advice companies in Australia. But if you are looking for the best Property loan advice Geelong, then you can contact us. Our company has excellent property lawyers that can give you great advice and save you from legal troubles.