There are many miscellaneous, ongoing expenses associated with home ownership. Such expenses may include one or more of the following: real property taxes, sewer assessments, fire district taxes, water, heating oil and common expense assessments (for condominiums). It is likely that a seller will have paid some of these items in advance, covering a period of time that extends past the date of closing, i.e., the date of transfer of title. Therefore, adjustments will be made to reimburse the seller for expenses paid in advance that will relate to a period of the buyers’ ownership of the property. Many of these items have different payment periods.
There will also be instances when items are not payable until after the period of service has passed. In that event, the seller will reimburse the buyers for expenses the buyers will incur after the closing which relate back to the period of the seller’s ownership. There may also be adjustments for miscellaneous expenses that may have been negotiated between the parties during the pre-closing period. For instance, the seller may agree to do some repair on the house or substitute an additional item (such as a fixture) in lieu of having to do repairs, or there may be an agreement to reimburse the buyers for the cost of having the repairs completed after the buyers take ownership. All of these arrangements or agreements should be reported to us prior to the closing so they can be included in the financial calculations and adjustments that we prepare prior to the closing.