Q: My husband, our two-year old daughter and I have been living in a home for a year. We used to live in a high rise condo in a nearby city, and that property has been up for sale for over a year.

I’m the listing agent as well as the owner and we currently owe more money on the property than it’s worth. Because of a ruling by the board of directors of the condo, I am not able to rent my unit or do a lease/purchase.

I currently owe $186,000 and bought the unit for $289,000. The condo is probably worth about $170,000.

Here’s my question: Should we walk away from the property and allow the lender to foreclose, or just sell the property for less than I owe and take the money out of my savings to pay it off? I have already used some of my savings for a down payment on our current home, so I don’t have that much money left. It would virtually wipe us out.

A: If at all possible, don’t walk away from this property and allow the lender to foreclose, not when you owe less than $20,000 (you owe $186,000 and you figure you can get $170,000).

You should lower the price on this property and get it sold any way you can. It’s unfortunate but many condominium and homeowner associations have pushed to keep renters out of their buildings just as owners in those complexes need to rent the most. There’s a balance between how many rentals may be allowed in a complex and where the market is now.

The trouble with foreclosing is that you have the funds to make up the difference between what you owe and how much the property will sell for. If you have the funds to make up the difference, the bank may come after you anyway.

So, you might as well pay the difference up front, when it’s much less than it would be later, after bank fees have been factored in.

It’s in the building’s interest not to have you go into foreclosure as well (it kills the comps for everyone else). If you want, you can go to the building and tell them that you’ll let the property fall into foreclosure unless they allow you to rent for a year while you attempt to sell it. That’s playing hardball, but it might make them wake up and smell the coffee.

If that doesn’t work, then just be as aggressive as you can and get the property sold. Homes are selling in some communities. While the prices might be deflated, these sellers are getting more money from their short sales than if they had allowed the property to go into foreclosure. If you can minimize your expenses and get the property closed, you may be able to pay the difference and lessen the impact on your credit history and credit score.

I hope this helps. Let me know what happens.