Thoughts on Losing $50,000 on Our House – And How it Could Have Been Worse

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Selling your home in a down market is tough. So far, I’m 0 for 2 in selling homes for a loss. My wife and I have owned two homes, and we lost money on both of them. Obviously, no one sets out to lose money when they buy a home, and no one feels good…

Selling your home in a down market is tough. So far, I’m 0 for 2 in selling homes for a loss. My wife and I have owned two homes, and we lost money on both of them.

Obviously, no one sets out to lose money when they buy a home, and no one feels good about it. But at the same time, I realize it’s probably not as bad as it seems.

My wife and I sold our first home in 2010, and unfortunately, we lost a lot of money on the transaction. It took us 7 months from the time we listed our house until the time we finalize the sale, and we lost just over $50,000 on the transaction.

The second home sale was more recent, coming in 2019. We purchased this house right after selling our home at the end of 2010. We bought in early 2011 and lived in that home for 8 years. We sold at a loss of $3,000 on the purchase price. But when you add in upgrades, improvements, and real estate agent fees, the final tally was closer to a $25,000 loss on paper.

I have conflicting thoughts about losing this much money.

Yes, we lost money. But living somewhere costs money regardless of whether you rent or buy.

My situation is a reminder that buying a house is a luxury. You won’t always make money when you buy a home. It is very possible to lose money on your purchase. And yet, even after losing money on the first two homes my wife and I owned, we decided to buy another home.

In this article, I’ll share more about

  • our decision to sell our home in a buyer’s market,
  • why it didn’t turn out as bad as it could have been,
  • and tips for listing your home in a down market.
 

Deciding to Sell Your Home in a Down Market

We knew we would lose money before we even put our home up for sale. We listed our house for sale in the middle of the Great Recession, and housing prices had dropped substantially since we bought our home. The real estate inventory in our market was flooded with foreclosures and other homes (there was a 15-month inventory on the market when we listed our home for sale). All signs were pointing toward us taking a big loss on our home – and we did.

Our story isn’t unique – people around the country are facing similarly depressed real estate markets and many people can’t sell their house for a variety of reasons. If they must sell, people are forced to sell at a loss, which brings both financial and psychological challenges. The difficult markets are even causing some people to walk away from their mortgage.

Wait it out if you can – but don’t let it stop you if you have to move

If ever there was a time to try and wait out a bad market, that was it. But not everyone can wait – you may need a larger home for a growing family, your job may take you elsewhere, or you may have to move for a variety of reasons.

Our decision to sell was two-fold:

  1. We needed a larger home for our growing family, and
  2. We wanted to relocate to be closer to my wife’s family.

We didn’t have the luxury of waiting out the markets, and renting out our home wasn’t a good option either (the house was a townhome, with relatively high monthly association fees, which would have made it difficult to break even if we rented it out).

So we decided to sell it.

Unfortunately, the real estate market took a huge hit in the time that my wife purchased the home in 2005, and our area had a glut of foreclosures. We initially listed our home for $25,000 less than we had in it. Nothing like taking a $25,000 hit before you even sell your home!

Of course, it doesn’t stop at the list price – you also need to take other expenses into consideration – closing costs, real estate agent commissions, taxes, home warranty, and other fees. The initial estimate was that we would lose in excess of $40,000… and we were right.

Accepting the offer on our home

Fast forward 6 months. We received an offer on our home almost exactly 6 months after we listed it. The offer was for $40,000 less than we had in the home. This was the first real offer we received and we wanted to accept it. So we made a small counteroffer.

They asked for a $10,000 price reduction from the list price, and we countered with a $7,000 price reduction. We didn’t ask to meet halfway because we didn’t want to lose the sale. In retrospect, they probably expected to meet halfway and we probably would have gotten it. But at that point, I wasn’t willing to lose a sale over $2,000. The buyers accepted the counteroffer right away, so we were good to go.

Wrapping it up. After we agreed upon a sale price we just had to dot the I’s and cross the t’s. We paid the closing costs, commissions, a few minor repairs found in the house inspection, taxes, fees, and other expenses.  Altogether, we ended up losing just over $50,000*.

*This isn’t a perfect calculation when you take into account factors such as time value of money, interest, etc. It’s simply a calculation of the purchase price minus the final sale price, commissions, fees, and associated costs.

Losing money is a tough pill to swallow, but it isn’t the end of the world.

Now that I’ve had a month to digest this, it isn’t as bad as it first appears. Yes, we lost $50,000. That’s tough to swallow. But we also get to move on with our lives – we aren’t locked into a house which is too small for us and we get to live closer to family, which is priceless.

But there are several more reasons why I’m not too upset about losing $50,000.

Thoughts on Losing Money on Our House

We knew we would lose money on the transaction, so we were prepared for it. Being mentally and emotionally prepared to lose money is important. In the grand scheme of things, we just considered losing money on our home a sunk cost and decided to move on. Here are some factors which made the loss easier to swallow:

We Had Enough Equity to Cover Our Losses

Losing money isn’t fun. Writing someone a check when you’ve already lost a lot of money is even worse. Thankfully, we had enough equity to cover our losses, so we didn’t have to write a check at closing. We put down 20% of the purchase price when we bought the home, and we paid extra on our mortgage payments. This combination ensured we would receive a small check when we sold our home instead of being upside down on our mortgage.

If We Didn’t Buy, We Would Have Paid Rent

Some people say renting is throwing away money, but I disagree. There are many advantages to renting a home.

Many people who rented during the real estate bubble avoided taking substantial losses when they had to move. And in our case, we may have actually come out slightly ahead, depending on how you slice the numbers.

We lived in our home for just over 5 years. If we would have “thrown away money” on rent for 5 years, we probably would have lost a similar amount of money, give or take a little.

Renting a comparable home in our area likely would have cost between $1,250 – $1,500 per month. But you can play with numbers to see how much renting will cost over time.

For example, renting for 5 years is 60 months.

  • $1,000/mo * 5 years = $60,000
  • $1,250/mo * 5 years = $75,000
  • $1,500/mo * 5 years = $90,000

Again, this doesn’t take into account other factors such as the time value of money as the down payment could have been invested, home repairs, or other expenses.

Either way, we would have spent a lot of money on housing.

Does Renting Cost More than Buying? The answer depends on many factors, including where you live, how long you plan on remaining in the home, and many other factors. Additionally, selling a home is very expensive. Real estate transaction fees made up a large portion of our “losses” when selling our homes. In some cases, renting is more expensive than buying. But in many cases, renting is cheaper in the long run and provides more flexibility. See this Rent vs. Buy calculator from the NY Times to compare renting an buying in your area.

We Could Have Lost More Money

The real estate market in our area of the US was hit pretty hard. We just left the Dayton, OH area, which lost tens of thousands of jobs, and for a period of time, it was in the top 10 for foreclosures. As you can imagine, that created an excess of inventory and decimated housing prices. Thankfully, our neighborhood was relatively insulated from the price drops compared to some of the other neighborhoods.

Some People Can’t Afford to Sell, Even if They Want To

The real estate markets in some locations are so bad that the majority of people are upside down on their homes and selling would mean having to fork over tens of thousands of dollars they don’t have. Many people are so far under in their mortgages that they decided the best course of action was to walk away from their mortgage.

We Can Make it up on the Back End

We want to buy another home, and the saving grace for us is that real estate prices are lower in most places, hopefully making this a good buying opportunity for us. Our hope is that we can get more house for our money when we buy our next home. Our goal is to stay in our next home for the next 5-10 years, so hopefully, things will turn out better the next time around.

All of these things may sound like rationalizations, and to some degree they are. But it also serves as a reminder to myself and others that real estate isn’t a guaranteed investment.

How to Sell Your Home in a Buyer’s Market

The real estate market doesn’t always want to cooperate when it’s time to sell your home. Sometimes the market is booming. And sometimes it’s very slow. If you plan to sell your home in a buyer’s market, there are some things you will have to do.

Research Your Local Real Estate Market

As you know, real estate is local. Do research on homes that have sold in your neighborhood, and in your wider area. Get an idea of the price range of homes that are comparable to yours, and consider what you are likely to get. In my neighborhood, there are a lot of homes for sale; just on my street, I can see four homes for sale. Many homes are selling for $20,000 below “market value.”

Zillow, Trulia, RedFin, and many other online home value estimates are just that – estimates. The true value of your home is whatever anyone will pay for it.

Have Realistic Expectations on Price

In order to sell your home in a buyer’s market, you are going to have to price it competitively. This means that you might take a hit on the home. Additionally, you may have to show that you are willing to move on the price. Your listing should include an “original price” and a “current asking price.”

You could also update your ad to highlight a price drop. Many buyers can afford to be picky and look for sellers willing to move on the price. Realistically, in a buyer’s market, you will not get what you think your home is worth.

Add Value to Your Deal

You will also need to add value to your home. Sellers are expected to pay closing costs as it is. However, you may need to add something else, such as paying for inspections, offering a flooring allowance (if the carpet is worn) or paint allowance, or some other upgrade.

Point out the features of your home, such as a fully-fenced yard, a water purification system, or a drip-system for the garden, or anything you have done to improve your home’s value. If you have extra features, make sure that you highlight them to encourage buyers to see your home as a good bargain.

Use the Internet to Advertise Your Home

Most people look for homes online. You need to have some sort of an Internet strategy to help you sell your home in a tough market. If you have a real estate agent, find out what sort of online packages are offered. Remember that lots of pictures are desirable. You want to show your home to best advantage, and buyers are more likely to look at your home if there are pictures online.

Make a Good First Impression

If you want to get the best possible price for your home in a buyer’s market, you need to make a good first impression. When publishing pictures of the outside of the home, take pictures each season. A dated photo underscores the fact that the home has been on the market forever, and you may not get the best offers. You should also make efforts to keep the home clean, improve the curb appeal, and clear out the clutter. If you are having trouble, a professional staging might help.

What are some of your tips for selling in a buyer’s market?

Have you bought or sold a house recently? How did it work out for you?

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About Ryan Guina

Ryan Guina is the founder and editor of Cash Money Life. He is a writer, small business owner, and entrepreneur. He served over 6 years on active duty in the USAF and is a current member of the IL Air National Guard.

Ryan started Cash Money Life in 2007 after separating from active duty military service and has been writing about financial, small business, and military benefits topics since then. He also writes about military money topics and military and veterans benefits at The Military Wallet.

Ryan uses Personal Capital to track and manage his finances. Personal Capital is a free software program that allows him to track his net worth, balance his investment portfolio, track his income and expenses, and much more. You can open a free account here.

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  1. Mike Holman says

    Man that sucks!

    Don’t forget that rent should be an imputed (I think that’s the word) value as well.

    Had you decided in 2005 to rent the house instead of buying, you would have saved on interest, made some money (maybe) with your capital, but you would have had to pay a lot of rent as well.

    Looking back, you might have been better off renting – but the difference is probably a fair bit less than $50k.

    • Ryan says

      It sucks, for sure, but tomorrow’s article explains why it isn’t as bad as it first appears. (I had it all in one article, but then it was about 1500 words and I decided it made sense to break it into two articles).

      I could probably sit down and determine exactly how much we lost on the sale or would have saved (or lost) if we had rented, but to be honest, it has too many variables, and probably isn’t worth my time to run the numbers. I would have to dig through our mortgage payment history to determine how many extra payments we made, money kept in escrow, determine what a reasonable rent would have been, calculate interest, then try to place an opportunity cost on the money, which means determining how our investment portfolio did over that time period….

      Too much work to figure out something that has absolutely zero basis on what will happen in the future, which at this point is all that matters! 🙂

      So my plan now is to focus on how we can make this work to our advantage and write the loss off as just that – a loss. It’s a pain, but it’s in the past and time to move forward. 🙂

  2. Money Beagle says

    If you’re buying another home, you can offset a good portion of the ‘loss’ by virtue of the fact that you’re likely getting the other home for cheaper. Many people want the best of both worlds. I heard someone who was looking to downsize a bit lament ‘Boy, prices are so low that it’s a great time to buy but I just can’t handle taking the loss on my house now.’

    I remember when I sold my condo a couple of years ago, I was livid when I got an offer for $15k lower than the asking price and my realtor advised me to accept it, but then I realized that we got the home we ended up moving to for $30k less than I would have in the peak market.

    Being realistic and realizing that you can’t have it both ways is the biggest part of this process.

    • Ryan says

      Money Beagle, that’s our exact line of thinking. We are planning on buying a larger home, and in our area the larger homes have dropped by a larger dollar amount than the smaller homes (which makes sense if everything dropped by the same percentage).

  3. Pete says

    We were in the opposite situation a few years ago – buying and selling a home at the top of the market. We sold our townhouse for $205,000, making a $60,000 profit on our purchase price from 5 years earlier. We also bought a home for $275,000 – which is now appraised at around 235,000 after the market drop. Recently saw that the approximate value for our old townhome is back down around $150,000. So in the end, we did well on the townhouse, and the house we moved into has lost less value than the townhouse did.

    If we were to sell today we wouldn’t be underwater in our home, but it would definitely hurt to see that we weren’t getting anywhere near the $275,000 we paid for it.

  4. Becky says

    We just listed our house in mid-January located in NW Ohio/SE Michigan. Great timing, right? At this point, we have it listed just slightly below what we paid for it in 2003. We’ve had a lot of activity, which I thought was promising considering the time of year, but no offers. It’s kind of depressing when people comment that a 2200 square foot house with a finished basement (not included in the footage) and over 700 sq ft of unfinished bonus room (again not included) as “too small”. Also, we knew we’d like to sell fairly quickly, so we priced our house at the lowest amount in our neighborhood (3 other houses for sale, all 10k to 40k higher).
    We are selling because of a job transfer, so hopefully everthing works out in the end. We’re currently renting in the new city until the house sells.

  5. krantcents says

    What you describe is the bad side of the story! The other half was you bought in the same crummy market where you were in the driver’s seat. Hopefully you received a good deal on the other end! Another choice may have been to rent your house , refinance and bought another home. That scenario may have allowed you to gain if your house gained in value. I rented out my house when i bought my current home 13 years ago. I sold it a year later and enjoyed a gain in value.

    • Ryan says

      We thought about renting out the home, but there were several factors that made us decide not to rent it out: we were moving out of state, so we would have had to pay a property management company to handle any issues that came up, we lived in a townhome with fairly large monthly association dues, and we had a 15 year mortgage. The combination of these would have caused us to run a substantial deficit based on the market rate for renting out our home. Refinancing might have made renting it more palatable, but even then it would have been running close to a deficit. Selling our home allowed us to cut ties with the property and start fresh. Now the hope is that we can find a good deal in our new location and make up for the loss we experienced on our last home!

  6. Allen says

    I am afraid that I am headed for the same outcome on the upcoming sale of my home. I bought my home in the middle of the housing crash and now I am afraid that my job is about to move to another city….Too far to commute.

    I am simply horrified of what my house might be worth today. I felt like I was getting a good deal at the time, but two and a half years later, I have my doubts. There are houses for sale close to my neighborhood that were for sale when I bought mine nearly three years ago.

    The one bit of good news is the fact that my company usually offers some sort of financial assistance in relocating to a new home, but it just won’t be enough to ease the pain.

  7. PigPennies says

    Such a tough pill, and I have been through the same “rationalizations” as you. I haven’t sold my house, but I can see how much I’d lose based on sales in my neighborhood. Even though it’s easy to toss those rationalizations aside and stew instead in the misery of lost money, I think the two best points are that you would have been spending money on rent anyway, and you are buying in the same down market that you just had to sell in. Given the insulation in your neighborhood, maybe you’ll even be buying in a further discounted market! And as for the time value of your down payment, given the way the stock market acted along with the real estate market until recently, you could very well be just breaking even now on an investment started 5 years ago.

    • Ryan says

      I had the same thoughts regarding the investments – that I might have just broken even in the long run. The only way I could really determine that is to go back and look at my portfolio average from the investments I had at the time, and extrapolate based on those numbers. But I decided against doing that because spending the time looking back doesn’t do me any good moving forward and my time is better spent looking for a new home and making sure I get a solid deal so I can make it up on that end. 🙂

  8. Kris says

    Wow, that’s a big hit to take, yet you handled it well financially and emotionally. We have neighbors going through something similar, just got married and bought a house about a year ago, are already getting divorced, and will likely need to take big loss. Good luck going forward.

  9. Rich Cederberg says

    I couldn’t agree more about paying extra on your mortgage. Great tip to help people gain equity and avoid being upside down. Great article Ryan.

  10. Evan says

    Has this experience made you sour at all on pre-paying the mortgage unless it is your “forever” home? That money could have grown elsewhere?

    • Ryan says

      No. We still received a guaranteed return on investment, and paying down the principal more quickly still reduced the amount of interest we paid on a monthly basis. I don’t think you can ever go wrong by repaying your mortgage or any other debt early.

      And our next home will probably be a “forever” home. It’s tough to predict how long we will be there, of course, but I’m hoping to be there for at least 10 years or more.

      • Evan says

        Ever compute that “guaranteed return?” I am only curious because that is one of the main arguments that everyone makes and I don’t really get it. If you bought the house in 2005 but made an extra payment of $10K a month before you sold the home, you didn’t get any return. If you put an extra 10K before the market fell out in 2007/2008 isn’t your return negative?

        I haven’t worked these answers out in my head so I’d love to hear your thoughts on the subject.

        Also, “still reduced the amount of interest we paid on a monthly basis” – I don’t think you did. A traditional mortgage is an amortized loan so your extra payment attacked the back end so you would have rid yourself of the last interest payment (moving forward in time)

        http://www.myjourneytomillions.com/articles/happens-when-make-extra-payment-on-loan/

        But by selling you got rid of that payment anyway.

        I am not one of those guys who think you shouldn’t pay off your home as soon as possible, just some thoughts I have been struggling with recently and your post brought it all out!

        • fredct says

          The “guaranteed return” is the interest saved. If you have a 5% loan, and you pay $1000 extra one month, you save $50/year on interest (minus what the tax benefit would have been) for every year going forward.

          The link you post is interesting… essentially what it says (I think) is that in some cases, the payment isn’t credited now, but rather it’s credited against ‘future payments’.

          That may well be the case sometimes, but I don’t think it’s standard practice. It does prove though that it’s worth watching closely what happens on your next statement. And to make sure the bank is doing what you expect.

          The specific numerical examples given on that page illustrate the benefit of what happens when it’s applied to principal. See in example #2 that month 30 the interest charge would have been $46 for the standard payment, but decreases to $39 with the expedited payment. That $7 in interest saved in that month alone.

        • Ryan says

          fredct, I think some lenders automatically apply extra payments as future payments instead of against the principal. Our mortgage lender applied our additional payments toward our principal when we requested it. So in our situation, the additional payments saved us money.

          But that wasn’t the case in the example on Evan’s site with the student loans.

  11. Debt Donkey says

    Sorry to hear you took such a hit, but at least you were mentally and financially prepared for it. I bought my house at the height of the bubble in June 2006. How was I to know? The consolation is that I have no plans to move, and we love the house (but I still don’t even want to know how much value it lost). You just have to learn to adapt, move on and reach for the next goal I suppose. Thanks for the good post (and the great blog). Best wishes….

  12. krantcents says

    I would have multiple brokers tell me what is the so called market price. The more professional advice I could get, the better off I might be. If it is priced right, it should sell quickly! The next step is to stage the house, not professionally, but get rid of the clutter, extra furniture to make rooms look larger, and maybe paint when necessary.

    • Ryan says

      De-cluttering was one of the big things my wife and I did – we took several van loads of boxes to Goodwill, sold items on Craigslist, etc. We made some money, got some tax write offs, and made our home more presentable. I recommend it to anyone selling their home!

  13. Peter says

    Selling in this market can me hard. It’s very difficult to make a profit selling Real Estate.

    One option might have been able to lease out your home for a few years till the market comes around. There are a lot of people that still have good jobs and need a place to live. And the number of people like that is increasing as this crisis continues. So doing a lease to own and you are their bank or just renting as long as the payments meet you mortgage payment and say plus insurance might make it work. When I bought my last home I looked at what if I want to move in a year. Can I rent this in this market to meet all my costs and still profit? It did so I bought it. When the market turns around in a few years I might make a buck or too.

    Best wishes,
    Peter

  14. Joe Q. says

    Your post should be required reading for people here in Canada. The housing market in the big cities here is like what the USA was like in the summer of 2006.

    The average price of a detached home in Toronto is about $750,000 and in Vancouver it is about $1,100,000. The median annual household incomes in these cities are about $80,000 and $70,000, respectively. There is a pervasive “housing only ever goes up” mentality and rampant speculation, especially in the condo market.

    We don’t have nearly the basket-case mortgage lending market that the USA had prior to its crash, but nearly all new buyers here put down tiny down-payments and take long amortizations. To top it off, mortgages in Canada are all structured like “balloon loans” where the payments are amortized over 20-30 years but the mortgage terms only last five years (after which the mortgage has to be renewed at a re-negotiated interest rate).

  15. Jeremy says

    Ryan,

    If you honestly can’t tell that you would have been better off renting over the past 5 years, then you are not qualified to dispense financial advice.

    Have you calculated how much of your mortgage payments were going to interest and included that in your $50,000 loss?
    Have you accounted for maintenance costs you wouldn’t have if you rented?
    Did you fully account for all transaction costs?

    • Ryan says

      Jeremy, I did not calculate how much went to interest vs. principal during the 5 years we owned our home – I would need to dig up our mortgage payment records and quite honestly, it isn’t worth the time to do so, seeing as how nothing actionable can come from it. Additionally, I would need to account for the mortgage tax deduction since we itemize or taxes, then determine which tax brackets we were in during each of the years we owned the home to determine how much the tax deduction was worth.

      As for maintenance, the big items were accounted for in the $50,000 quote: we finished our basement and painted the interior before we put it on the market. Other maintenance costs were minimal during the time we lived there – our house was fairly new, and we basically only spent money on things such as light bulbs, filters, etc. Other transaction costs, such as closing costs, real estate agent fees, etc. are included in the $50,000 quote.

      Would we have been better off renting? It’s probably a closer argument than it appears on the surface. The fact remains that we would have had to at least rent a home for those 5 years, which would have cost us close to $1,000 or more per month in our area, or close to $60,000. (we were in the home for 5 years, 3 months, so let’s use $63,000 as our number).

      So I could look up the numbers in my mortgage statements and tax returns, try to figure out exactly how much it would have cost us in rent, and try to determine an exact amount of gain/loss. But to what end? I think it would be an hour or two of number crunching to come up with a number that has no actionable purpose.

      • fredct says

        While I don’t expect you to dig into your records, nor would be as rough as he was (you do a plenty good job running a financial board), Jeremy is undoubtedly correct that owning cost you much more than renting ever could have. And while it would take hours to get an exact number, it would probably take 10 minutes to get one that’s within a few thousand of being correct…

        $63K to rent…

        Now, the cost for the home?
        1) $50K for the loss (includes realtor fees, closing costs, etc per your statement)
        2) On a 30 year mortgage, in the first 8 years, roughly 80% of your payments are interest (on a 15-year, it’s 50%). So even assuming an insane mortage that was half the price of rent…. $500/month 15-year mortgage (a highly unlikely scenario), that would mean 50%*500*63= ~$16K
        3) Add in property taxes… I’d have to imagine you paid at least $10K over the 5 years. In many part of the country you could easily pay $20-$50K, but lets go with $10K).
        4) Add in home owners insurance (which is significantly more expensive than renters). Over 5 years, that’s got to be another $10K, right?
        5) Subtract property taxes on 3 & 4. Even at a maximum federal & state combined rate of 45%, and assuming you would have itemized anyway so the maximum advance (pretty unlikely) that $13K saved.

        So, $50K + $16K + $10K + $10K – $13K = $73K.

        That’s $10K worse. And that’s using some wildly optimistic scenarios such as a 15-year mortgage that’s half the size of equivalent rent. Realistically the difference probably isn’t $10K, but morel like $25-50K or more. And that’s also not counting other factors as all, such as the opportunity cost of the downpayment.

        I’m not saying you should beat yourself up, I’m not saying you should have known, and I’m not saying you should regret it. But Jeremy is right… the equation isn’t close.

        • Ryan says

          Good back of the envelope analysis, Fred. We had a 15 year mortgage, and we made extra payments when possible, so we were paying quite a bit more on principal each month by the time we sold our house. Homeowner’s insurance vs. Renter’s insurance is something I didn’t consider – Renter’s insurance is substantially less expensive.

          As it stands, it’s a big lesson learned on my end. We are actually buying another house, but we intend to live here for at least the next 5-10 years. Hopefully we’ll make it up with this house. Then again, you never know what will happen!

  16. American Debt Project says

    Hi Ryan, new to your site, so sorry if you’ve answered this elsewhere..where did you guys move to? And why did you decide to leave Dayton/how did you choose your new city?

  17. K says

    Hi Ryan,

    I’m not sure how old this post is because I don’t see a date listed, we live in the Dayton area and are very concerned about how much we stand to lose on our home. We purchased two years ago (recently married and very eager to buy a house…), but unfortunately, we bought small thinking that the market had gone as low as it was going to go and that we would just get out in five years when it was time for an upgrade. (You can’t undo the past, but we would never make the same decision twice.) Do you have any advice about selling in the Dayton market? We are north, so unfortunately we are losing out on some of the popularity of the Kettering/ Beavercreek area. We are so afraid that when the time comes and we want to get out, we won’t be able to swallow the loss that is sure to come.

  18. Mike says

    Just went through some “similar” – when my wife and I married, we put her house up for sale, but being a small town and a big house proved to be disasterous for a housing market.
    After 5 years, we sold it for a $50,000 loss … any idea how that works as far as capital losses in taxes? Did you make any back in the way of taxes?

    • Ryan Guina says

      Mike, unfortunately, you cannot claim a capital loss on the sale of a personal residence. The IRS requires you to report a capital gain when you sell a home, but they do not track or give credit for a capital loss on the sale of a personal residence. Sorry. (The rules may be difference for investment properties, but you would need to show the intent to either rent the home or repair and flip for a profit).

  19. Jackie says

    Looks like we’re going to suffer a similar experience. Any advice on letting go of that loss and the “what ifs” ?

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