What is a settlement statement?
A settlement statement is basically a statement that contains all the apportionment of outgoings and liabilities attached to the property and required by the contract to be adjusted. The items that are usually included in the settlement statement are mortgage discharge fees, rates, water charges, body corporate levies, rent, etc. The information that is needed to prepare a settlement statement is collected by your conveyancing lawyer from the contract, searches, other professionals that are related to the transaction, such as the property manager.
The settlement statement will tell the buyer how much they need to pay the seller at settlement, which would then help the buyer determine how much they will need to prepare in their short fall account. The settlement statement is generally available to the parties to review about 5 days before settlement.
It is important to understand though that the settlement statement is subject to change prior to settlement and is only a draft until settlement date. Hence, it is always important to make an allowance for this when you are preparing funds for settlement. It is always good to overestimate than to underestimate the funds needed for settlement.
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