Should I sell my underwater Condo?

Asked by Joe, Appleton, WI Mon Jan 2, 2012

In 2005 I purchased a condo for 112000, six years later I find myself 25000 underwater with FMV at 75000 and mortgage balance 100000. In that time I got married, moved into my wifes house and rented out my condo for the last 2 years. The market doesn't seem to be improving and I'm finding it harder to find renters. I can get about 650 per month for rent, my mortgage payment is 900 and condo fees 275. Hard to figure if I should sell and take a loss or continue to rent it at a loss and hope market turn around. We don't want to sell her house at this time because we need the room for her children and her house isn't as far under as mine any advice would be helpful.

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Ron Thomas, Agent, Fresno, CA
Mon Jan 2, 2012
At the point you have to consider the negatives:
You probably cannot convince your Lender that you have a HARDSHIP.
Wisconsin is a RECOURSE state, meaning that they can, and probably will come after you for the Deficiency.
You will probably lose LESS by sticking with it.
Not counting what it will do to your Credit.
The good news, is that the IRS will not be coming after you for the paper-windfall.

This is something you will have to decide for yourself.

Good luck and may God bless
1 vote
Cornhole, Renter, Pittsburgh, PA
Mon Jul 30, 2012
I would hold on, if possible. The market cannot get much worse, and will turn around eventually. Ride it out!
0 votes
Alain Picard, Agent, Puyallup, WA
Mon Jan 2, 2012
If you can hold out on selling you should do so and continue renting your condo out until the market value increases however that could easily take at least a couple of years.
0 votes
Laura Feghali, Agent, Stamford, CT
Mon Jan 2, 2012
Hello Joe,
The condo market will not be turning around anytime soon to show any significant appreciation in value. Since it is difficult to find suitable tenants in your area then you might wish to absorb your losses and sell now.

I suggest that you contact a real estate agent in your locale so that he can discuss a comparative market analysis of recently sold condos in your neighborhood that are similar to yours to determine what the current value is. This may help in your decision making.

Best of luck to you!

Laura Feghali
Prudential Connecticut Realty
0 votes
Ryan Smith, Agent, Murrieta, CA
Mon Jan 2, 2012
Hi Joe,

It depends on your financial situation. If the underwater condo is creating a hardship on your family you may want to consider a short sale. I do agree it could be years before the market turns and you are able to break even. Good Luck!
0 votes
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