Q about net worth

[mustache you a question]

Quick question about home value in the net worth figure.  I've been calculating my equity in my assets (home value - mortgage) and my remaining mortgage amount as a liability.  I've seen some posters on here use their home value in assets and mortgage value in liabilities though, which is the proper way to use your home in the net worth calculation?

[PiobStache]

Mathematically what has to happen is the numbers need to reflect an accurate picture of financial standing.  This means the entire value of the home should go into the asset side and the entire balance of the mortgage into the liability side. 

If you just put the equity portion of your home in the asset side, and the entire mortgage balance on the liability side, you've in effect subtracted the mortgage balance twice.

[aceyou]

This^^^

And if you want to get more technical, then you can take the home value and multiply it by .94, if you would likely use a realtor to sell it eventually, which generally ends up meaning you pay about a 6% commission in the US. 

For example, the zillow estimate of my home is 282,000, which from other home sales in the neighborhood is probably very accurate.  However, if I were to list with a realtor, I'd get about 263,000 after all the realtor fees and closing costs are factored in.  And I have 150k left on the note, so I could use 132k or 113k as my home equity, depending on how I want to look at it. 

[slugline]

Net worth is really not a difficult concept -- assets minus liabilities. Basically you just imagine selling everything you own and paying off your debts. The pile of money left over represents your net worth.

Just because there's a mortgage on a house should not make it worth less to a prospective buyer.