No. of Recommendations: 2
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.

Print the post  


UGC Disclosure Notice Regarding Credit Card Posts
Community board discussions about credit cards are not provided or commissioned by banks who may have advertising relationships with The Motley Fool. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.
TMF Credit Center
The Motley Fool Credit Center arms you with real tools and simple messages, that will help you in every credit situation.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.