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Personal Finances / Credit Cards and Consumer Debt
|Subject: Re: How to account for home purchase||Date: 5/12/2013 6:28 PM|
|Author: aj485||Number: 307023 of 309248|
I'm wondering how to account for the deposit check for a home I am purchasing. I could create an asset account and simply have the deposit check be a transfer from my checking to that asset, but I'd rather not include the home in my list of assets, since its not liquid and the value would get stale after a while.
Well, if you don't want to count the homes value as an asset, then the home deposit check needs to go into an expense account, and you would see an coinciding drop in your net worth, unless you want to count part of your home's value (deposit check/down payment, etc.) as an asset, and not count the rest. But that seems overly complex to me.
What do other people do?
I count my house as an asset at the purchase price, and don't worry about changing values until I actually sell it. If I were worried about updating my home's value, I would probably change it once a year or so, based on a combination of Zillow or another home valuation model, comparables in my neighborhood and/or the tax assessor's value of my home.
Right now I'm putting into my 'major home improvements' expense account, which was used for things like a bathroom remodel, or new washer/dryer.
That sounds appropriate if you don't want to count your home's value as an asset.
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