Can you bring any cash to the table? If you are not asking for debt forgiveness from your lender, this is very do-able.....an unsecured note works well if your credit is good. But, then we must consider how you'll qualify for the new mortgage. Feel free to call me and we can talk through a couple of scenarios. Read this blog posts on short sales if you are a little baffled about what everyone's talking about here.

Gary, I agree the best bet is to stay in the house if you can afford it, if you can't then speak to your lender. A lender will work with you, but they will look at all you assets including cash, stocks, 401K. All your assets are in play before the lender is willing to forgive any part of your debt. Note that a short sale or foreclosure will impact your credit score between 200 and 300 points which will impact your ability to get a new loan. The market in PWC is turning and we are seeing multiple offers on low priced properties and improvements on properties that are priced right. Hang in there.
Ron Tardif
Weichert, Realtors
The Gainesville Team, 703-472-5967

Just want to make one clarification since Don obviously did not read my entire answer, I too said that your best bet is to stay there. I was just giving an example stating that short sales can happen even when someone is current on their payments. And I did mention that it could negatively impact your loan qualification. I never said it was your best option, nor do I feel that it is in this case.

NonRealtor is right: Don't sell unless you're prepared to bring $90,000 to closing. And a short sale is not likely to be approved.

Peggy is right: A short sale is not your answer.

Samanatha is, well...NonRealtor echoes my thoughts: "The banks are not going to lose money just because you want the 1 acre wooded lot and nicer house that is currently cheaper than your house."

Cindy is right: Stay put.

Unfortunately, you bought at the top of the bubble. Not only that, but with gas around $4.00 a gallon, Gainesville has become somewhat less attractive. Then there's the commute on 66, which burns a lot of people out.

You probably have a very nice house...just without enough land. Enjoy your house. Prices will eventually recover. Yes, wooded 1 acre lots may be a bit more expensive in the future, but they'll still be around. And if you've got some cash--it wouldn't take much--put an option on a 1 acre lot. For maybe a few thousand dollars, maybe a bit more, you could reserve the right to purchase the lot for x years (5-10, probably) in the future at $x. That way, you're controlling the lot, and you know what it'll cost if you exercise your option to buy. Note: I'm not saying to buy the lot or put a deposit down on it. Option it. Then, when real estate recovers, you sell your home, exercise your option, and buy the lot.

Hope that helps.

Can you afford the house you are currently in? If you can not show financial hardship, you will not qualify for a short sale. The banks are not going to lose money just because you want the 1 acre wooded lot and nicer house that is currently cheaper than your house. Be a good worker, keep your job, you're going to be in that house for a long, long time. Or you could bring 90K to closing as I suggested in the previous post. Call your bank, ask them about a short sale for your property. Good luck

Gary,

You may be able to qualify for a short sale with your lender. I just closed a deal for a client whose appraisal came in much lower than expected based on recent sales. She was not behind in her payments and was not in a foreclosure situation, so it did take 2 months but we got it to close.

If you are okay with staying there, your best bet is to sit tight. A short sale is much better looking on your credit than a foreclosure, but it will still be there and may affect your loan qualification. Another option is maybe buying the 1 acre lot home and renting it until the market recovers. Or maybe do a rent-to-own on your property, with so many people not qualifying for loans, you may be able to find someone who is okay with owner financing.

Good luck!
Samantha Sedlak-Moren
Abbitt Realty
(757) 810-6153

You can bring 90K to closing when you sell your house. Then you can buy the 1 acre wooded lot home.

Gary,
In most cases homes purchased within the last few years have lost value. A Realtor could give you specifics, but even in a normal market, due to the shift, most homes purchased after 2004 or 2005 have lost value.

I'd just sit tight unless you have to move. Or rent it out and come up with a the downpayment.

Gary,

Unfortunately you are upside down on your home and unless you are in financial distress due to job loss, illness or a escalating adjustable rate mortgage then the best thing to do is to stay put. The second thing you can do is rent your current home out and if you have enough additional money buy the home you want on a bigger lot.

If you have a mortgage rate that is adjusting causing your payments to rise which makes it difficult for you to make your payments you need to get on the phone and talk to your lender immediately. Depending on your lender they may work with you to freeze your interest rate. If you fall behind in your payments then your chances of qualifiying for a loan under today's tougher guidelines will be difficult. You can sell your home at a loss but you haven't described anything that would make me thing that you would qualify for a "short sale" and possible debt foregiveness.

There are thousands of homeowners in your same situation throughout the area. Our market does have cycles and this one may take longer for prices to recover but they will.

Cindy