JL's Columbia SC Real Estate Blog: You Didn't Really Lose Money. It Never Really Existed.

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

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


JL Boney, III - Columbia, SC Realtor - Coldwell Banker Residential Real Estate

 I specialize in Columbia, SC real estate and the surrounding areas, including Blythewood, SC, Kershaw County, Fairfield County, and Lexington, SC. If you are in the market to buy or sell a home in Columbia, SC or any of the surrounding areas, I would love the opportunity to speak with to see how I can help. Thanks for reading and feel free to contact me if I can be of service to you.

Office- 803-788-1450     Cell- 803-730-9601     Email- James_Boney@Yahoo.com

My Columbia SC Real Estate Website

My Columbia, SC Real Estate Blog



Subscribe to JL Boney's Columbia SC Real Estate Blog by Email


Comment balloon 60 commentsJL Boney, III • December 15 2009 04:29PM


And if those people would have sold during the boom, they would have had to pay more for another home...

Posted by Laura Giannotta, Your Realtor Down the Shore! (Keller Williams Realty - Atlantic Shore ) about 9 years ago

Great post JL.  We had a long discussion about this at a Women's Council of Realtors Luncheon a few months ago.  Agents were talking about how they counter this argument from a potential listing client.   Your explanation is great!

Posted by Rachelle McMahan (Golf Savings Bank) about 9 years ago

Same holds ture in the stock market.  It isn't real money until it is in your hands.  I also use a 3-5% return and figure what the home would be worth over the number of years owned.  That works really well.

Posted by William Feela, Realtor, Whispering Pines Realty 651-674-5999 No. (WHISPERING PINES REALTY) about 9 years ago


I couldn't agree more. I would try but I think you wrapped it up nicely :)


Posted by "The Lovely Wife" (Broker Bryantnulls Wife) The One And Only TLW. (President-Tutas Towne Realty, Inc.) about 9 years ago

Laura- They would have certainly had to pay more for the next one.

Rachelle- It can make for a good discussion can't it.

Bill- I know more people who think they lost money in stocks than real estate.

TLW- I try my best to get a point across.

Posted by JL Boney, III, Columbia, SC Real Estate (Coldwell Banker) about 9 years ago

I tell this to homeowners all the time. I have a few of my parents' friends tell me this and the own their home without any mortgages so after tell them and explaining this the appreciate that I put it up front. 

Posted by Marcie Purcell, Realtor, Bucks & Montgomery Co PA (Long and Foster Real Estate, Inc.) about 9 years ago

People always want to talk about what could've been.  It is what it is.  Can't spend something you don't have.  Oops, that statement might offend some banks!

Posted by Kyle Jan, Phoenix AZ Homes for Sale about 9 years ago

I have always told my clients this very same thing.  People think they have lost money they never had in the first place.  I say be glad for what you DO have.

Posted by Jean Hanley, Specializing in Folks Who Want To Buy/Sell Homes (Coldwell Banker Kivett Teeters) about 9 years ago

We as a society have to stop viewing our homes as investments and instead view them once again as homes.  William's assessment of 3-5% rate of appreciation is what people should expect.  Your not going to grow rich quick off of this type of return, but in the long run you'll do well.  And that's the key, long term outlook.  Great post and best of luck to you JL

Posted by Jerry Murphy, CRS, SRES, Anthem, Phoenix, and Scottsdale AZ Real Estate (Long Realty West Valley) about 9 years ago

Personally, I feel the exact same thing about the stock market.  People have been complaining about how much money they lost so they can't do this or that, but they didn't lose anything as it's all on paper.

People can sit and time a stock, time a  housing market, time an interest rate, but more than likely, they're all going to time it wrong to where they could have always gotten a better deal if they held out or moved quicker.

Posted by Donna Harris, Realtor,Mediator,Ombudsman,Property Tax Arbitrator (Donna Homes, powered by JPAR - TexasRealEstateMediationServices.com) about 9 years ago

Great advice for people!  You can always say shoulda woulda coulda!  The future is the only thing that is real for a home.  Thanks!

Posted by Jeff D. Clark (John J. Howard & Associates) about 9 years ago

For people staying in their homes for a long time market value doesn't mean anything.

Posted by Richard Lecinski (Long Realty Company) about 9 years ago

The people hurt the worst were the ones who bought at the peak and then found themselves upside down when they needed to sell.

Posted by Betty Knowles, TeamKnowles REALTORS® - Springfield MO Real Estate (Coldwell Banker Vanguard - www.teamknowles.com) about 9 years ago

Greed is a terrible thing to see..... counting money you do NOT have as if you DID have it is just down right wrong in my opinion...

Greed is part of what got us into the market we have now.....

We need to be a nation of investors, NOT consumers.....

Don't look to get the profit NOW...wait a while....

Posted by Alexander Harb, Dallas, Texas Real Estate Investing (Knights Investing) about 9 years ago

I agree . . . but then there's the client in 2005 who refused to consider an offer of $750,000 for their run-down house that was being sold as land.  It's now worth about half that and they're still sitting on it!

Posted by Margaret Goss, Chicago's North Shore & Winnetka Real Estate (Baird & Warner Real Estate) about 9 years ago

JL - Laura Giannotta, Comment #1, is so correct!  It is all relative.

Posted by Wendy Rulnick, "It's Wendy... It's Sold!" (Rulnick Realty, Inc.) about 9 years ago

JL, in our area not being able to get back to the purchase price of a home after 6, 7, 8 years is common place from the 2001 and 2002 purchase timeframe. The other areas of the country it is new, but not around here. It is depressing sometime the slow appreciation or complete lack of recovery with prices, but it does come down to supply and demand, location, and the local economic conditions.

Posted by Gary Woltal, Assoc. Broker Realtor SFR Dallas Ft. Worth (Keller Williams Realty) about 9 years ago


We have had those that wereforced to sell sooner thatn they had hoped and came in upsidedown  but then there were those that chose to re-finance and cash out.  HMMMMM

Posted by Don Rogers, Realtor, Broker, CDPE, GRI, OnullFallon MO & St Charles County MO homes (Keller Williams Realty Chesterfield) about 9 years ago

I agree with Donna's perspective...just like the stock market. It has been worth more and less...but it only matters what its worth when it is time to sell.

Posted by Lisa VonBargen, Estes Park Real Estate Photographer (Photography7522) about 9 years ago

The problem is that some people made that phantom equity materialize by taking out a home equity loan.  It would be nice if that loan just disappeared now but they now have a real debt with the equity that no longer exists.

Posted by Tim Maitski, Truth, Excellence and a Good Deal (Atlanta Communities Real Estate Brokerage) about 9 years ago


This is so simple and so brilliant! The same people probably bought new cars that are worth a fraction of what they paid for them but they don't care about that/ Congrats on the feature!

Posted by Richard Weisser, Richard Weisser Retired Real Estate Professional (Richard Weisser Realty) about 9 years ago

Quantifying loss in real estate is only realized when you sell it, or can't afford the pyments. Great feature post

Posted by Claude Cross, Charlotte NC Homes For Sale (Homes By Cross, Inc. ) about 9 years ago

JL - You couldn't have stated this any better!  Absolutely spot on! 

Posted by Donna Bigda, Greater New Haven CT Real Estate (RE/MAX Alliance) about 9 years ago

I agree with what Tim just said. Yes, they took out a home equity loan that banks were pushing to consumers like drug dealers.

Posted by Deborah Wilson, Stark County OH Real Estate (Hackenberg Realty Group) about 9 years ago

I wish I thought that people have learned that their homes are not 401k plans, checking accounts or get rich quick schemes.  And you are absolutely right - it was all play money.

Posted by Lise Howe, Assoc. Broker and Attorney Licensed in DC, MD, VA, (Keller Williams Capital Properties) about 9 years ago

Does "buy and hold" apply to real estate too?  Houses are investments, and we all want them to go up (when we own them).  While it's true that investments go down, it still hurts.

Posted by Ray Mikus, Green Means Go! (Green Light Real Estate) about 9 years ago

They somehow don't get it was all on paper to begin with...

Posted by Heather Adkinson, Real Estate Agent - Moses Lake (Windermere K-2 Realty LLC www.propertiesinmoseslake.com) about 9 years ago

Featured @ Club Chaos

Posted by C Tann-Starr (Tann Starr & Associates, Inc.) about 9 years ago

JL- You are correct.  Same with our commissions.  Sometimes I think I'll be making 1.5% but stuff happens and it ends up being .50%.  Unfortunately for these folks...perception is reality.  We oif course know that unless you can time the market perfectly the assessment that they lost money just isn't true!  Great topic

Posted by Nevin Williams, Senior Mortgage Advisor (Fairway Independent Mortgage Corporation) about 9 years ago

The reality of the so called lost equity in my home hit me a few months back.  I wanted to take out a home equity loan to fix the roof and to finally remodel my ancient kitchen and bathrooms.  I can easily make the payments but my house can't appraise for what it once did.  So it did translate into a real loss for me because I now can't borrow real money that I could have before.  I have to live in substandard housing even though I can afford higher payments.

Posted by Tim Maitski, Truth, Excellence and a Good Deal (Atlanta Communities Real Estate Brokerage) about 9 years ago

I totally agree with you. You make your point very well. But, sadly, it still stings a little when you think about what you may have had.

Posted by Melissa Zavala, Broker, Escondido Real Estate, San Diego County (Broadpoint Properties) about 9 years ago

The hard truth in our market though is that people have mortgages on homes that are only worth 1/3 to 1/2 of what they owe.  When you still have to pay for the mortgage its hard to tell someone, they aren't losing anything.

Posted by Joyce Thomas, Your Home Sold Guaranteed! (eXp Realty) about 9 years ago

Hi JL -- Sometimes sellers inject artifical constraints into the marketplace when they aren't realistic.  Some can't, and that's another category, but an artifical constraint all the same if the market is at a different place today.  A savvy buyer and buyers agent will sniff these out and stay away from them.

Posted by Chris Olsen, Broker Owner Cleveland Ohio Real Estate (Olsen Ziegler Realty) about 9 years ago

Good point! Some times you just have to try to appreciate what you do have. The glass can be half empty or it can be half full. The choice is always yours to make.

Posted by Nathan Tutas, Your Central Florida Real Estate Expert (Tutas Towne Realty, Inc.) about 9 years ago

JL, this is one cold hard fact that is terribly difficult to accept! This is where "The truth hurts" really applies!!

Posted by Dawn Maloney, 330-990-4236 Hudson & Northeastern Ohio (RE/MAX Haven - Northeast Ohio Real Estate Specialist) about 9 years ago

The reality is that the fluctuations in prices can have a disturbing affect on people.  Certainly it's normal to feel like you've lost money.  If you were to prepare a net worth statement, which everyone should do, at least with some frequency, you'd have to "mark to market" the value of every asset.  Home prices have tumbled and the reality  is that a net worth statement that includes real estate would be impacted.  It's a hard sell to say that the money never existed.  Yet I do believe in "money heaven," where much of this money has gone.

Posted by Frank Castaldini, Realtor - Homes for Sale in San Francisco (Compass) about 9 years ago

JL~  Great post that is catching some fire!!  People certainly do not like to think about the value of their home going backwards!  My new ?'s are...Do you like the home?  Can you see yourself living here? Is it affordable to you?  Just buy it for these reasons ALONE!!  Happy Holidays!

Posted by Stephen Arnold, CRS, GRI, SFR (HomeSmart Elite Group) about 9 years ago


If you're selling and buying into the same market it doesn't matter, everything being equal.

Posted by Terry Chenier (Homelife Glenayre Realty) about 9 years ago

Money on paper is NEVER money in the bank until you are holding a deposit slip that is endorsed by your bank! Yes equity was lost but just as many of my fellow AR Realtors state above...you sold low and bought low. Ideally you want to buy low and sell high.  Sometimes you just can't do that.  But yes it all evens at the end.

Posted by Wendy Rich-Soto, Realtor Strategize, Stage, Sell, Owner of SellingLASouthBay.com @ the WRichTeam (Keller Williams Realty, LA Harbor) about 9 years ago


great post.. I couldnt' agree more. the glass is certainly half full!

Posted by Greg Nino, Houston, Texas (RE/MAX Compass, formerly RE/MAX WHP) about 9 years ago

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

Posted by Will Nesbitt, Nesbitt Realty is a family-run brokerage. (Nesbitt Realty at Condo Alexandria) about 9 years ago

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!

Posted by Amy Hunter (Hearth & Home Videos) about 9 years ago

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!

Posted by Tammie Turner, B. A., Business (Tri-Lakes Realtors) about 9 years ago

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

Posted by Terrence Wright (Array Management Group) about 9 years ago

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.


Posted by Dave Murray (DMTX Realty, Coldwell Banker United, Realtors) about 9 years ago

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.

Posted by Gregory Bain, For Homes on the Jersey Shore (Mezzina Real Estate & Insurance) about 9 years ago

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.

Posted by Terri Poehler, Coral Springs Real Estate Agent (Realtor) about 9 years ago

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


Posted by Hannah Williams, Expertise NE Philadelphia & Bucks 215-953-8818 (Re/Max Eastern inc.) about 9 years ago

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.

Posted by Paul C. Wilkinson, GRI, REALTOR -Menifee, Murrieta, Temecula - (951) (CENTURY 21 Preferred) about 9 years ago

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!

Posted by Sarah Eubanks, Preferred Oregon Loan Consultant & Notary Public (Hill Valley Financial Services) about 9 years ago

great blog - and very factual too!!

Posted by Noah Levy, Coldwell Banker Highland Park IL (Coldwell Banker) about 9 years ago

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

Posted by Dianne Bartlett (Brightside Realty, LLC) about 9 years ago

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.

Posted by Bob and Debbie Gibbs (J. Rockcliff Realtors) about 9 years ago

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)!!!!

Posted by Anna Banana Kruchten CRB, CRS 602-380-4886, Arizona's Top Banana! (Phoenix Property Shoppe) about 9 years ago

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



Posted by Johnny "Culdesac" Yankoviak (Weichert Realtors) about 9 years ago

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

Posted by John Cannata, Texas Home Mortgage - Purchase or Refinance (214-728-0449 http://TexasLoanGuy.com) about 9 years ago

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

Posted by Liz Loadholt, Realtor--Broker-in-charge - Trainer--Relocation Director Covering SC (Liz Loadholt- AgentOwned Realty- Covering SC) about 9 years ago

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".

Posted by Christine Donovan, Broker/Attorney 714-319-9751 DRE01267479 - Costa M (Donovan Blatt Realty) about 9 years ago

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

Posted by Gary Swanson (Century 21 Harris & Taylor) about 9 years ago

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

Posted by David Whitehead (RE/MAX Pace Realty ) about 9 years ago