Good question! Short answer: underwater is an industry term meaning you owe more on a home than it will sell for.
Interesting sidenote: I cleaned foreclosures in Las Vegas on the side and saw two homes where the homeowners turned on the water taps and walked away from the home. In both cases, it was days before someone gained access to the property to shut it off. They wanted to make the home literally “under water.”
DON’T DO THIS. If only for the guy that comes in later, please don’t do this.
Longer answer: in an underwater situation, one may feel there is not “out.” This is not the case; walking away from a home is not the nuclear option people think it is. In some cases, the bank may be able to pursue you for a deficiency judgement for years afterwards.
The better answer is often a short sale, where you sale the home for less than the amount owed but the lender consents to the sale and forgives the remaining debt.
In other cases, we may be able to work within your existing equity to make a sale happen.
Questions? Give me a ring at 719-440-6626!