Thread: Upside Down Definition

Hi Condo research,

I think you got it. An owner bringing money to the table to close. Some can do it, most can not.
As far as raising the cap to allow these "distressed" owners to rent, may cause financing complications to all of the owners. I have not checked FHA's guidlines lately, but it was capped at 75% owner occupied last I checked.

Well...if a seller is upside down on a condo (or any property for that matter), let's hope he or she does not need to sell now.

This term is most often used here in Minnesota, really nationwide, when a seller owes more on a property than it is worth.

What to do in a case like this? I am a proponent of holding onto the home, not putting it up for sale on the MLS, and riding our the market. Historically real estate has gone up over time here in the US. If you are upside down now, you may not be in a few years.

If you do have to sell, you will need to have the cash available to bring to closing. Obviously many sellers can not do this...so they are truly stuck. Here is where a short sale comes in.

If a seller needs to sell because their personal financial situation is not allowing them to afford the property anymore, they can look at short selling the home. Short sales here in Minnesota are time consuming and complicated. You need a top real estate agent to navigate you through the waters of this type of transactoin.

At the end of the day, if a person can still afford the payment on the real estate, we recommend holding onto the property and riding out the market. Prices will come back....eventually!

I hope this helps out!

I think you got it also. Condo market is extremely cyclical like the housing market.

Speculation is out the window on condos and so is the money the banks were lending for them.

No more 100 % financing or even 90% financing if it isn't your primary.