I hope it works out for you.
Doing a short sale on your current home would most likely be a huge credit mistake and keep you from getting the new home. Short sales are usually only for homeowners that are in financial distress.
Again, speak with the Lender as soon as possible! And, of course always let your Realtor know honestly what is going on, so that your earnest money can be returned if need be on the new home.
I am sure your Realtor can provide you with many creative financing options. Have you considered renting the condo until the market turns enough for you to show some appreciation on the condo. Currently in our area rentals are in demand and you may find that the cash flow the unit generates may provide you with a good long term investment. If you have concerns about being a landlord, a management company may provide an alternative for you as well.
Did you talk with the REALTOR before you signed the contract to build?
Your REALTOR is probably giving you great advice at this point. They know your precise situation.
If you look at the link below it appears that you are in a declining market. So you probably have a builder that is hungry. Did the builder ask you if you were qualified by a lender for the purchase?
Is your Realtor also representing you in the purchase of the new property?
I would ask your Realtor these questions. It is their job to help you figure out solutions and to manage your move, part of which is the financing.
Without having the answers to any of these questions my suggestion is that if you DID qualify for the purchase while still owning your condo, then you might want to look into the possibility of not selling and renting it. If you do consider that option check with your CPA regarding the tax implications. it is possible that the first few years will be tough, but as the economy turns around, might work out in the long run.
Have you spoken with your current lender about requesting the possibility of a short sale? This is possible when the outstanding loan balance on a property is more that the sale price, and you request that the lender forgive a portion of the debt on the property, which would allow you to sell the property and pay the lender the entire net proceeds of the sale. The lender would then forgive the outstanding loan balance and call the loan even with a . There are likely negative credit implications, but I understand that it is not as bad as a bankruptcy. You should check with your attorney or tax advisor to see how it would affect your credit. Normally you would need to have an accepted offer and also be behind in your payments before the typical lender will consider a short sale.
Maybe some other agents will have some other ideas for you..
Sorry to hear about your situation - best of luck to you.. Please email me at firstname.lastname@example.org if you have any questions regarding this or if you need any more info..
Coldwell Banker Residential Brokerage
California DRE #01856079