So ... this house is small enough that you feel you need an addition and so awful you literally wrote that you would consider tearing it down and building new.

And yet ... you think you could lose 250 to 300K? You overpaid by that much? Because the market hasn't tanked since 2023 (I should know, I just sold a house this month and have been watching the market for a couple of years). This doesn't make a lot of sense to me, overpaying by that much, even if you were talking about an expensive suburb like McLean.

At any rate, sounds like you should just rent it out.

Can you share the location or zip code? We can get a better sense what you might be up against.
Don't really know where you could be to have under $300K unless it was a condo!

If you do sell at a loss and it is a capital loss, then it (slowly) can be deducted from your income when calculating Federal taxes. See a CPA or tax attorney for the details on this.

Anonymous wrote:Do you like the location and neighborhood? Is the problem solely the actual house?

This is the key question

Don't rent it out. If you can't sell it, you definitely can't rent it out at a price that makes sense.

Can you afford to keep it? If yes, can you afford to borrow to renovate? If yes, do that.

If you can afford to stay but not renovate, I agree with PP that you should figure out what you like about the house. And if you post what is wrong with it, we could try to suggest fixes.

Anonymous wrote:How can it be that bad if so many people where biding on the house and you escalated? Just renovated the house and live through it, sit on the property for 5 years and then sell it if you really must.

Maybe they didn’t use the escalation clause and just overbid? But still seems odd to overpay by $300k - the house wouldn’t appraise, for one thing.

Do you like the location and neighborhood? Is the problem solely the actual house?

I would find or add something that you love to the house, focus on that, and wait out the market another 5-10 years.

There are plenty of people who live in shitty houses their whole lives and are happy. Plenty of others who never have the opportunity to live in a house. Gratitude can go a long way.

This is totally normal.for this area. It typically takes 10 years to not be under water on a house in this area. Renovate and deal with it.

Maybe hire a really good decorator/space planner to make the most of the space. Would be much cheaper and might help you hate the place less

How can it be that bad if so many people where biding on the house and you escalated? Just renovated the house and live through it, sit on the property for 5 years and then sell it if you really must.

We were in this situation. We put it on the market at an aspirational price. No offers. Had to keep reducing, then took it off the market when we had a very low offer. Only to HAVE to put it on the market and then (of course) walked away with even less.

That said, I am thankful to be out of the place and we've had time to recoup our losses at this point and are in a much better situation. However, we did have to leave the area.

Let's say you lose 300K. How much would it cost to get into a place that is a better fit?

I would continue to live there a few more years and hope for the best. In the future I would say don't go with an escalation clause. How much was the house and how many people were in the bidding war?

Have you actually tried putting it on the market in the spring ay the price you need? Did any offers at all come in?

You said, "(I could write a whole separate post of how terrible our realtor was and definitely took advantage of our lack of knowledge of the area, questionable comps in retrospect, etc)." I hope you do write another post or expand on this more as you could help others. Please say more about this.

Stop blaming the realtor when you choose to get into a bidding war.

We moved to the area and purchased a home in a close in suburb in 2023. After getting wildly outbid 6 times we re-calibrated our expectations and put in an offer on a house that did not check all our boxes. We won the escalation that time and purchased the house. We realized we had made a big mistake almost immediately but realtor convinced us to go through with the deal using lots of scare tactics. (I could write a whole separate post of how terrible our realtor was and definitely took advantage of our lack of knowledge of the area, questionable comps in retrospect, etc).

We have since realized it was a horrible mistake and we are miserable in this house. The problem is that we cannot sell the house for anywhere close to what we bought it for. After watching over 2 years of comps we think we would lose 250k-300k selling the house, if not more. It is horrifying and SO embarrassing. I would consider selling at a 100k loss worth it just to get out of the house but think that’s too optimistic. We’ve mapped out our options as follows:

— sell the house at a loss. This essentially locks in our loss, and while I doubt we will recover much value in appreciation any time soon it just seems foolish.
— continue to live in the house and consider putting on an addition and reno to give our family much needed extra space/better layout. This feels like sinking more money into an already underwater investment and I’m not sure we’d even increase the value of the home that much. We’d also have to live through construction.
— tear down the house and build new. This might make some sense but we don’t have the capital for this.
— rent out the house and rent elsewhere. I calculated that this would increase our annual housing costs by $25k a year. This probably makes the most sense but I worry that this still leaves the house question hanging over us. Also there are almost no rentals in our kids elementary zone so very slim pickings.

Advice welcome and please be kind and constructive.