Special offer

You Didn't Really Lose Money. It Never Really Existed.

By
Real Estate Agent with Coldwell Banker 69190

Columbia, SC Real Estate I want to first say that I do feel for the people who have purchased a home that is now worth less money than it was at the time of closing. We have seen this situation over and over again nationwide and I think there is no state that has not been affected in some way by the housing crisis. However, these are not the people I wish to discuss in this post.

 I have noticed a lot of would be sellers and home owners out there who say that they have lost money and really haven't. These are home owners whose homes are currently not worth what they would have been at the height of the market 4 or 5 years ago but they are still not upside down. In fact they have a decent amount of equity in their homes and they would make a profit off the sell of that home.

Columbia, SC Real Estate

  The fact of the matter is that there are lots of home owners out there who would have made more money on their homes if they chose to sell them during the boom. However, I don't think it's fair to say that they lost money, because the money itself was never physically there. It was not a part of the original deal and it was never realized through any sell of the home.

 Frankly, if you have good equity in your home and can still make a profit off of it, you should be happy about that rather than focusing on what you could have had. What if you lose the rest of your equity and you are upside down in the loan, that would be much worse than not making as much profit as you once would have.

Columbia, SC Real Estate

Comments (60)

Will Nesbitt
Nesbitt Realty at Condo Alexandria - Alexandria, VA
Nesbitt Realty is a family-run brokerage.

We don't have money that we don't have  ...

Dec 15, 2009 09:24 PM
Amy Hunter
Hearth & Home Videos - Sudbury, MA

The one that gets me the most:

The sellers way overprice their home.  They reduce it to just somewhat overpriced and get a fair market price offer.  They refuse to even consider it because "we've already lost $xx"  !!

I wish there were a way to convince sellers that when they sell their house for a fair price they did not "lose" the money between that and what they had overpriced it at!

Dec 15, 2009 11:12 PM
Tammie Turner
Tri-Lakes Realtors - Branson, MO
B. A., Business

I once had buyers who said they lost $200K on the sale of their home in another state. Come to find out, they would have made $200K more on the sale of their home if they had sold it 2 years sooner. They hadn't actually lost money on their sale.

With that attitude, I guess I could say that I've lost millions in the last 12 years of my real estate career because of all the properties that I could have bought that increased in value!

Dec 16, 2009 12:28 AM
Terrence Wright
Array Management Group - Troy, MI

I agree. Money is not lost it just changes hands. It's a zero sum game.

Dec 16, 2009 02:47 AM
Dave Murray
DMTX Realty, Coldwell Banker United, Realtors - Austin, TX

My father always said "money not earned isn't money lost, and money saved isn't money made." It's very true, and surprising how many people get confused.

Julie

Dec 16, 2009 02:47 AM
Gregory Bain
Mezzina Real Estate & Insurance - Little Egg Harbor, NJ
For Homes on the Jersey Shore

Under certain conditions you are correct. However, I know people who did buy with real money and a large chunk of it is gone. It would have been gone had they invested in the stock market, too. But, they did not buy to flip or trade up. Their money is gone and it is in someone else's pocket. The paradigm shift of economics.

Dec 16, 2009 02:48 AM
Terri Poehler
Realtor - Coral Springs, FL
Coral Springs Real Estate Agent

I get this all the time. Not a realistic view on things. Because, when you sell in the boom, you have to buy in the boom. You can't have your cake and eat it to.

Dec 16, 2009 03:08 AM
Hannah Williams
HomeStarr Realty - Philadelphia, PA
Expertise NE Philadelphia & Bucks 215-820-3376

JL..What a wonderful post and well worth a star..Thanks

Hannah

Dec 16, 2009 03:26 AM
Paul C. Wilkinson
CENTURY 21 Preferred - Menifee, CA
GRI, REALTOR -Menifee, Murrieta, Temecula - (951)

JL, I had a friend lose their home in foreclosure because they had 'withdrawn' the money from their home. So the money to them was real...but they didn't realize the had already taken it, spent it and it was gone!!  When it came to sell,  the money they had already pulled out wasn't enough, they wanted more...call it greed, call it whatever, they could have sold it for what was owed and walked away with the loans paid, but they stuck to their guns (I stuck to mine) and after they convinced another agent to try and sell it for more, more, more....couldn't get a buyer and eventually couldn't even get a short sale approved in time and lost it to foreclosure.

Dec 16, 2009 04:15 AM
Sarah Eubanks
Hill Valley Financial Services - Oregon City, OR
Preferred Oregon Loan Consultant & Notary Public

JL...Agreed!  And with the above comments.  It is all in our attitude.  If we can find things to be grateful for, the wold is a much happier place!

Dec 16, 2009 04:17 AM
Noah Levy
Coldwell Banker - Highland Park, IL
Coldwell Banker Highland Park IL

great blog - and very factual too!!

Dec 16, 2009 05:20 AM
Dianne Bartlett
Brightside Realty, LLC - Austin, TX

JL:  Very well said.  Thank you for writing such a good post.

Dec 16, 2009 06:38 AM
Bob and Debbie Gibbs
J. Rockcliff Realtors - Danville, CA

I agree that whatever your home was worth at the peak is irrelavent unless you actually sold and capatalized. However, I work in an area of California where home prices, as an example, jumped from $350,000 to $1,100,000 over a 10 year period of time. That same home is probably worth $750,000 now. So, there are many out here who feel that their ship has sailed without them on it in spite of the fact that their home more than doubled in 10 years. In many cases these homeowners have mortgages, and if you assume a 20% down payment when they purchased they have realized at 900% return on their money over 10 years.

Dec 16, 2009 06:44 AM
Anna "Banana" Kruchten
HomeSmart Real Estate - Phoenix, AZ
602-380-4886

That crazy market was just an anomaly - had the market continued in a normal percentage with a more normal gain in equity most folks (who didn't buy high tide) would post likely still be ahead and have some equity.  I attempt to chart this out to sellers for their area and home. On paper it makes sense.  Besides like another gal/guy said - if they would have sold high they would have bought high.

You can't loose money you never had. It's funny money kids!

Plus - we're talking about our homes as homes (not ATM machines)!!!!

Dec 16, 2009 08:46 AM
John Culdesac
Weichert Realtors - Manassas, VA

Hi JL:

You are absolutely right!

Last night a talked to a couple who owns "free and clear" their 3 level colonial on an acre about 35 miles west of Washington DC.

They were "disappointed" that they could not get what they could have at the "height of the market".

Now bear in mind, they do not have any lien's on the property, and bought the home over 30 years ago.  They probably bought the home for about $50,000, and could easily get $300,000 for it according to the comps, maybe even more.

And yet the couple still complained about "the market", and said they will not put it "on the market" until they can get top dollar.

It is getting very difficult to deal with some of the people that just seem to be ungrateful.  Both seller's that assume their house is worth a million dollars, or the buyer's, who seem to think that the owner "owes them" because they are buying when some others are not.

Well, here in Northern Virginia, the housing market has picked up considerably, and if it hasn't in your neck of the woods, it will soon.  And when it turns around, it's like a switch that goes off and there is no turning back.

That's why I think it is more important then ever, to work with people that really appreciate our services.  Life is too short to waste on the haters.

Johnny "Culdesac" Yankoviak

www.johnnyculdesac.com

 

Dec 16, 2009 08:53 AM
John Cannata
214-728-0449 http://TexasLoanGuy.com - Frisco, TX
Texas Home Mortgage - Purchase or Refinance

But JL its much easier to think of how much I could have made on my home and blame others. :-)

Dec 16, 2009 05:03 PM
Liz Loadholt
Liz Loadholt- AgentOwned Realty- Covering SC - Mount Pleasant, SC
Realtor--Broker-in-charge - Trainer--Relocation Director Covering SC

JL ---- congrats on your feature -- I'm away from AR a couple of days and look what I missed -- this is a great post -- and you are so right -- many of these folks did not really lose any money.

 
                          Happy Holidays
                                 Clipart                                                                                                                     
                                 

Dec 17, 2009 06:08 AM
Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 714-319-9751 DRE01267479 - Costa M

This is a conversation my sister and I had a few years ago.  She kept telling me I was "rich" because of my house.  I kept saying it didn't matter unless I sold it.  She recommended selling and moving to Texas with the proceeds.  It would have paid for a nice house out there, but it's now "funny" money and money I have "lost".

Dec 17, 2009 03:25 PM
Gary Swanson
Century 21 Harris & Taylor - Grants Pass, OR

I agree with you JL.  There's no sense living in the past, we have to live with what is before us today.

Dec 18, 2009 04:11 AM
David Whitehead
RE/MAX Pace Realty - Crown Point, IN

Its called cycles we all go through them in life!!!

Dec 19, 2009 09:27 AM