Seller paid closing costs into escrow

[Anthony]

Where are you putting the cost of the home, into an asset account?
Shouldn't the money paid by the seller and put into your escrow
account reduce the purchase price of the asset?  If I'm reading this
correctly I don't think the money should be put on your balance sheet
at all until the deal is closed, at which point it would reduce the
cost of the home.  But I could be misunderstanding you.

On Mon, Apr 28, 2008 at 3:43 PM, Jason Ahrens <jason at cougarcorp.net> wrote:
> Eric Anopolsky said the following on 28/04/2008 11:24 AM:
>
> > If you provide more info on exactly what that money will be used for, I
>  > will try to give you more specific information.
>  >
>  Specifically some of the money the seller is paying is going to escrow
>  for future property tax and insurance payments.
>
>  Now, for all the other items the "seller" paid for, I didn't even bother
>  recording as they would all fall under the "administration fees", but
>  this one has a different end result. The money that goes into the Escrow
>  account from the seller will, in the future, be used to pay my property
>  taxes and insurance. It's a one time injection into the account from the
>  seller at closing.
>
>  For example, from the HUD form in the Reserves Deposited with Lender
>  (numbers fudged for simplicity):
>
>  Item - Paid from Buyser - Paid from Seller
>  Hazard Insurance - $100 - $0
>  Property Taxes - $700 - $300
>
>  In total, this "jumpstarts" the escrow account with $1100. Every month
>  then, I put another $300 in it as part of my monthly payments. Twice a
>  year property taxes are paid out. Once a year, Hazard Insurance is paid out.
>
>  So, it seems I have three options:
>
>  1) It's money given to me as part of closing (Income), but put into
>  escrow to pay some of those taxes and/or insurance fees.
>  2) It's money lent to me as part of closing by the seller on behalf of
>  the insurance and county (Liability)
>  3) It's money I "ignore" and have to be aware of the discrepancy when
>  the payments are dolled out adjust accordingly in my head until it's
>  "exhausted"
>
>  I figure #3 is the least correct way to do this :)
>
>
>
>  Jason