Definition
These are small changes made at closing to fix costs that were estimated differently than reality. For example, if property taxes were estimated at $3,000 but the actual amount is $3,200, that's an adjustment. One party typically credits the other.
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Adjustments are modifications to the originally estimated costs and appear on the final settlement statement. Common adjustments include tax and insurance prorations, HOA fee corrections, updated survey costs, revised title insurance amounts, and lender-required escrow adjustments. Some adjustments increase what the buyer owes (charges), while others decrease what the buyer owes (credits).
Pro Tip
Request your final settlement statement 24 hours before closing so you can spot and question any adjustments that don't look right.
Example
The loan estimate showed $850 in title insurance costs. The final settlement statement adjusted this to $920 based on the final purchase price. This $70 adjustment increased the buyer's cash due at closing.