If you don't have to sell, then don't. As you can see, there aren't many options when you're upside down on a home.

If you have to move, can you rent the property for at least close to what you're paying per month? If so, at least a stop-gap measure would be to rent your current home. Even if you do end up with negative cash flow, if it's manageable it might be better than taking the entire hit now. It'd be a gamble, especially if prices continue to decline for years, but that's something to consider. And check with an accountant; ask about the tax deductibility of losses on the property, as well as depreciation.

You're right about a short sale or foreclosure. And keep in mind that, to do a successful short sale, you're going to have to demonstrate financial distress to the lender. Not just that you want to move and are upside down. So you might even have difficulty there.

Talk to an accountant. And talk to a good Realtor who knows your area and should be able to give you some locality-specific advice.

Good luck.

Erica (or anyone on this blog),

I have to ask, what's going on out there in Fresno with all these houses for sale?

I'm approved and ready to buy my first house, but I'm trying to feel out what the housing market is like out in Fresno! Should I wait?

Sorry you 're in a bind, but any info is appreciated, as this is a huge step for me.

Erica,
Sorry, wrong state then. You are actually in a stronger position that people in California. Houses in our area are losing $100K to $150K. But, sorry I don't know any realtors in your area.

Thanks,
Harold

I have thought about a short-sale and I think I understand it like this: I have credit score in 740s and will have about 100-125 point reduction in FICO score. However, this is only if Countrywide will agree and IF I HAVE A BUYER. In this zip code alone, there are hundreds of homes in foreclosure and for sale. I am going to keep praying because I need out of this house. This makes me not even want to buy and so I just want to rent an apartment (which will probably be as much as my 1200 mortgage but without all of this drama). I'm 26, so I figured 3 or 4 years of paying off my credit cards, car and student loans won't hurt until this market gets better. At this point, a home that I can afford with a single income will probably be in neighborhoods like this in houston or an hour drive from my job. I'm educated, finishing my graduate degree in less than a year, but man was this stupid! Now I'm worried that my credit cards or car loans will sky rocket with the foreclosure/short-sale and I'll be headed to bankruptcy! Does anyone know of a realtor with experience in short sales because I have gone back to the realtor who sold me the house who knows nothing about the business! Thanks! Oh, this is for Fresno, TX (10 miles from Houston)-not California !

Have you thought about renting? There are people out there who don't have the credit to buy but can afford to rent. Just a thought.

Unfortunately, I have people with houses in Fresno and Clovis that walk into my office each day with the same dilemma you're facing. First advice is to not sell. Stay if you can and hold onto your investment. Second, contact your lender directly to see if they will be open to adjusting your payment or the assessed value of your house. If they say no, ask if they would be open to allowing a short sale process on the home without you missing payments. For the first time, some of the banks of my short sale clients are allowing that. The banks continue to receive payments during the months of a short sale process and you are more likely to maintain a higher credit score.

Final step if the above don't work is to do a short sale. I am a certified specialist in short sales who has specialized in Fresno and Clovis for over 20 years.. Feel free to contact me at hp@topproducer.com or visit my website at http://www.HomesInFresno.com for more information.

No matter what you're selling, the last thing you want to do (as you are now experiencing) is Buy High & Sell Low...

Unfortunately, you as the seller, don't dictate the market...the market dictates itself.

The best advice that I can give you is to find a way to stay put until the market tells you "ok, you can sell now and not lose money".

A foreclosure will prevent you from buying another home for several years...with a short sale, you can potentially have your credit repaired enough to purchase another home in as little as 18 months. KEEP EVERY OTHER BILL YOU HAVE CURRENT!!!

If the short-sale is the only issue on your credit, you'll be fine and back on your feet before you know it. You should also consider a Deed in Lieu of Foreclosure - although slightly worse for your credit than a short-sale, it can be much less ....annoying... to go through. Check with your lender...

Another option (although not fun) is for you to bring cash to the closing to cover the difference between the sales price and what you owe.

A good rule of thumb to remember is that there is no "sure thing" and "no such thing as a free lunch". Investing in Real Estate is ALWAYS a good gamble...if you can wait out the turns in the market. Investing in Real Estate on a short-term basis INVOLVES RISK. Investors need to understand that you are playing a $100,000+ Game of Poker...you get one hand and YOU CAN LOSE...but only if you aren't able to wait it out...if you can wait it out, you will almost always be safe.

If there's anything else I can do to be of assistance, please don't hesitate to contact me at http://www.HernandoLuxuryHomes.com - I'm happy to help!

Thanks,

-Josh