P.C. from New Haven County writes:
Dear Mister Condo,
I need to sell my condo fast. I have a medical condition that makes it almost impossible for me to navigate up and down the stairs of the townhouse I own. However, I am upside down in my mortgage and will need to “short sell”. I hate to do this as it will damage my credit and likely hurt the property values of other units here, many of which are owned by friends. Any ideas on how I can get out of my unit without damaging the property values of my neighbors?
Mister Condo replies:
P.C., how noble of you to think of your neighbors and their property values! I am sorry that you are having difficulty living in your condo and that you will damage your credit by performing a short sale to move the unit. On the upside, someone may be getting a great deal on your unit and as long as you have kept your common fees current, your fellow association members will likely be just fine in the long haul.
Real estate conditions fluctuate all of the time. Buy low and sell high is always the plan but there are just some instances, like yours, that require you to sell when the market is not favorable to you. I would suggest that you may be able to rent your unit for a few years and hope that the market turns favorable for you. Of course, there are no guarantees that will happen and you also have the issues of being a landlord and facing scrutiny from your association, especially if they are already managing a large number of renters.
The short sale you make today will have an immediate impact on your fellow unit owners if they are looking to sell or refinance their units as the short sale will still register as a sale and will likely effect appraisal values of other units. However, it is usually less than 5% of units that are turning over in any 12-month period so, over time, unit prices will rebound and stabilize. The same thing happens when units are foreclosed and auctioned, which usually brings in far less than a short sale. The bottom line is that tools like bankruptcy, foreclosure, and short sale are available to the banks to help keep them from owning bad debt. Communities generally recover. Hopefully, yours will, too. Good luck to you in your new home!