Selling a house in a bad market, is it better to ....?

We're upside down on our mortgage by several thousand dollars thanks to a slick refinance agent and my ignorance of mortgage workings. We already have the house priced at well below what we owe, but the price is inline with other properties. We will need to take money from my IRA to pay it off if we do sell it.... show more We're upside down on our mortgage by several thousand dollars thanks to a slick refinance agent and my ignorance of mortgage workings. We already have the house priced at well below what we owe, but the price is inline with other properties. We will need to take money from my IRA to pay it off if we do sell it. The options we have are 1. wait to well and use my IRA to pay off the difference. 2. Rent out the house, which I have NO desire to do. 3. Work with the lenders (2 lenders in this case Primary and secondary lender, not a 1st and 2nd mortgage.) to negotiate a "short sale". 4. and this is not really an option, but it may be the final outcome unless we can work something out...allow the house to go to foreclosure.
I am an intelligent person, but I am no good with big business wheelings and dealings and I am at a loss as to which route would be best. We are living with relatives in another state, where we move to, and need to be able to buy a home here badly.
Update: Thank you for all the fast replies. The house is in Ohio. There are a lot of houses for sale in the area, more than you'd think. We started out at the payoff price when we listed the house originally. which was about 7k over what others were going for. After about 3 months and very few showings, we dropped it... show more Thank you for all the fast replies. The house is in Ohio. There are a lot of houses for sale in the area, more than you'd think.
We started out at the payoff price when we listed the house originally. which was about 7k over what others were going for.
After about 3 months and very few showings, we dropped it a few thousand. I would rent to save our credit, but for no other reason. Being 2 states away would make it hard. I'll keep hoping that it sells, retirement can be replaced pretty easy...credit scores are much harder.
Update 2: Our reason for moving was due to a job offer my wife received and to be closer to family. I have been discussing renting the house with my realtor, and it may be the best path for us to take. My wife was dead set against renting, but now she sees how the market is, and is willing to look into it. Being 2 states... show more Our reason for moving was due to a job offer my wife received and to be closer to family. I have been discussing renting the house with my realtor, and it may be the best path for us to take. My wife was dead set against renting, but now she sees how the market is, and is willing to look into it. Being 2 states away is my only concern, but we can probably work out any problems. I thank everyone for their input.
12 answers 12