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Statement of Adjustments

Statement of Adjustments
Saroj Aggarwal is an accomplished content writer working in a range of niches for the past 7 years. She has a keen interest in environmental and conservation issues. With a Bachelor's degree in Commerce, Saroj is currently working to assist people with their investment and financial queries.
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When purchasing, refinancing or selling your home, you will need the services of different professionals from the first step to the closing. You may be required to hire a realtor, a survey or other professionals to ensure the procedure runs correctly and smoothly. One of your biggest concerns will be tracking of every coin you spend when selling, buying, or refinancing your home.

A real estate notary or solicitor (lawyer) will help you do all the paperwork required and simplify the whole transaction. On the closing day, your solicitor will have a sitting with you to ensure that the transaction has been completed in the right manner. The solicitor will also hand over the trust ledger statements or the statement of adjustments, which explains how every coin has been spent in the whole transaction.

Similar to a bank monthly statement, the statement of adjustments reflects all the credits and debits, and a balance indicated at the bottom of the document. The debit side of the buyer’s statement of adjustment reflects the amount a buyer has already paid e.g. down payment (deposit) while the credit side reflects the home purchase price plus other pre-payments by the seller. The balance reflects the amount that the buyer owes the seller on the closing date and is given by subtracting the total debts from the total credits;

Balance =Total Credits (Purchase Price + Prepaid Fees) – Total Debits (Deposit)

The balance (the amount you owe to the home seller) is shifted to the trust ledger statement, which has the same layout as the statement of adjustments. The trust ledger statement prepared for the buyer shows all the amount of money spent on closing day. The debit side lists all the fees paid to the seller on the closing day including the balance in a statement of adjustments, legal fees, title insurance, land transfer tax and any other fees payable on the closing day. These other fees may include: disbursements, warranty, HST and GST where applicable. On the other hand, the credit side shows the mortgage loan from your lender and your down payment (deposit).

Seller’s Statement of Adjustments and Trust Ledger Statement

As a home seller, you also need to keep a good track of cash flow during the whole home sale. You may have to hire some professionals and pay some fees to ensure a smooth transaction and transfer of ownership. The home seller will also receive two documents (statement of adjustments and trust ledger statement).

Similar to the buyer’s statement of adjustments, the seller’s statement of adjustments has both the debit column and the credit column. In the seller’s statement of adjustments, the debit column reflects any fees that the seller has to pay including the commission paid to the realtor and the unpaid taxes and utility bills (water, gas, oil, or electricity).

The credit column reflects the home selling price and other prepaid fees (prepaid utilities or prepaid taxes, which the buyer has to refund). The balance in the seller’s statement of adjustments is the amount that the buyer has to pay to the seller and is given by subtracting the total debts from the total credits;

Balance = Total Debits – Total Credits

The trust ledger statement prepared for the seller also has two columns, the debit and credit column. The balance in the seller’s trust ledger statement represents the amount of money that the seller will get from the sale, less any amounts that the seller will have to pay on the closing day. The credit side reflects the amount paid to the seller by the buyer (the balance in the statement of adjustment) while the debit side reflects any fees that the seller is required to pay including legal fees, real estate agent commission, and the mortgage balance on that home.

The balance in the trust ledger statement represents the amount you keep from the home sale. It is given by subtracting the total seller’s expenses on the home sale from the amount received from the homebuyer.

Balance (what you keep from the sale) = Amount received from the buyer – Expenses



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