Lizzo loses about $4M on her LA mansion – a third of its value. How to know when selling at a loss is the right move

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Lizzo loses about M on her LA mansion – a third of its value. How to know when selling at a loss is the right move

Lizzo recently sold her Beverly Hills mansion, losing too much to let the property go.

The Grammy Award-winning singer put the home on the market more than a year ago, according to a report in the New York Times (1). It is said that he bought it in 2022 from the manager of Warner Records for $ 15 million.

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When he listed his home in late 2024, the singer was asking $15.99 million, but the Times reports that the asking price has recently dropped to $12.5 million. However, the home ended up selling for $11.15 million — a loss of nearly $4 million.

The mansion isn’t short on amenities, as the 5,442-square-foot home has a private studio, theater room, saltwater pool, gym and outdoor kitchen with fire pit. It’s also in a gated community, sits on about a third of an acre and has “sweeping views of the canyon and hills,” according to the Times.

The property has also been home to another pop star – singer Harry Styles – although the current home was built in 2018. Styles’ previous home was demolished after he moved out in 2016, according to a Realtor.com report (2).

When selling at the loss of the right call

Selling a home at a loss is never easy, but sometimes it’s the best move you can make.

Circumstances that may push you to sell at a loss may include financial stress that makes it difficult to pay the mortgage, having to move quickly or dealing with a declining housing market (3).

If you can’t keep up with your mortgage payments, or if you find yourself in a situation where you’re underwater on your mortgage, it might make sense to sell at a loss, according to HomeLight (4). It may also make sense for those who are forced to relocate to sell at a loss.

You may also find yourself in a situation where the financial stress of managing your mortgage becomes too much to handle – the death of a spouse or divorce, for example.

If you’re underwater on your mortgage — meaning you owe more than the home’s value — you may be able to negotiate a short sale with your lender. A short sale is when your home sells for less than the mortgage balance, but the lender agrees to forgive the difference.

According to Yahoo Finance, this option requires you to be behind on mortgage payments (5). A short sale can also affect your credit, so it’s not a good option if you want to buy another home quickly.

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When keeping your home is the best move

According to HomeLight, situations in which you may choose to hold on to your home instead of selling at a loss include situations where the value of your home has decreased.

If you bought at the top of the market and suddenly your home is worth a lot less, it may make sense to stay put if you can still afford your mortgage and have long-term plans to stay in the home. In a situation like this, HomeLight says, waiting for the market to bounce back may make sense.

You may also consider renting your home instead of selling it, although you should consider all the responsibilities and potential risks that come with owning a property before making this decision. You’ll also need to research the rental market in your area to make sure you’ll be able to make enough to cover your mortgage and expenses.

If you are considering converting your home into a rental unit to sell and claim capital losses, Realtor.com warns that there are time requirements and other complexities to this strategy (6), and you should definitely consult a tax professional before doing this.