You could report it as an investment loss on Form 1040, Schedule D, as an investment loss, subject to the $3,000 annual deduction cap. The remainder of the $12,500 would carry forward to future years until exhausted.
On its face, a contract for the purchase of an asset is a "futures contract," and that is a valid investment purpose, which subjects the purchaser to the opportunity for gain or loss.
However, if audited, you would have to claim that your investment was not intended as a purchase of a principal residence, but rather for rental purposes -- because a loss against the sale of a principal residence is not deductible (and neither is the first $250,000 of any gain, if the property is held for at least two years).
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