Quickbooks Real Estate Auctioneering - Accounting

AxonWare Ltd – Quickbooks Resellers and Advisors www.axonware.ie

Real Estate, Auctioneering - Accounting Software

Recording a House Sale in Quickbooks

As with any accounting software system there are often many ways to record a transaction. The following is one possible method.

Background Scenario

q In our scenario a house in Dublin is sold for €100,000 Euro.

q The buyer pays the auctioneer (realtor) the €100,000 cheque to hold as an intermediary.

q Auctioneer charges 5% commission.

q The Auctioneer gives the house keys to the buyer.

q The Auctioneer pays the seller €95,000 (sales proceeds less commission)

Let’s set up:

· Customer Record for the “House Buyer”.

· Supplier Record for the “House Seller”.

· A Bank account called “AIB Current”

· A special Bank account called "House Purchase" account.

· A Service Item called Real Estate Fees

Real Estate Agent / Auctioneer receives €100,000 cheque from House buyer and holds this money as an Intermediary

Recording the “Payment” from the “House Seller” when she “supplies” her house as part of the transaction.

Notice how we use the “House Purchase” as a bank account

Paying back the “House Buyer”(customer) using the House Asset (keys) as method of payment.

Recording the Fees against the House Supplier

Normally you’d create a sale by selling a service or product. In this instance you create service income by taking a credit from a supplier.

Paying the House Seller the Sales Proceeds(less Real Estate transaction fees)

In our scenario we haven’t applied any VAT rates. This can easily be done. The auctioneer could also apply other fees (advertising expenses re-imbursed) in a similar way.

What the P&L Looks Like

How the Bank Accounts Look

House Purchase account

Type / Date / Name / Memo / Debit / Credit / Balance
Bill / 03/06/2007 / House Supplier / Sellers House in lieu of Payment / 100,000.00 / 100,000.00
Cheque / 03/07/2007 / House Buyer / Giving Buyer the keys (as payment) / 100,000.00 / 0.00
100,000.00 / 100,000.00 / 0.00
100,000.00 / 100,000.00 / 0.00

AIB Bank Account

Date / Type / Name / Memo / Debit / Credit / Balance
03/06/2007 / Payment / House Buyer / Realtor gets Buyer Cheque / 100,000.00 / 100,000.00
03/07/2007 / Cheque / House Supplier / 95,000.00 / 5,000.00
100,000.00 / 95,000.00 / 5,000.00
100,000.00 / 95,000.00 / 5,000.00