Got promoted have to move, what to do with current home

Congratulations on the promotion! Do you have an accountant or tax advisor you can discuss this with?

A short sale is when your lender accepts an amount less than you owe to satisify your debt obligation. You cannot short sale your home just because there is negative equity. There has to be a hardship - loss of income, no assets such as savings accounts, stock accounts or retirement accounts. If you have assets, the lender will expect you to fullfill your mortgage obligation.

A short sale and/or deed in lieu of foreclosure will affect your credit score, but not as much as a foreclosure.

You might want to consider leasing your current home and buy another home in Washington. Speak with a mortgage consultant to get their opinion on what you can afford if you do this. Some lender may require a signed lease on your current property to determine what you can afford on a new mortgage payment.

In closing, talk to your accountant or tax advisor, then talk with a lender or mortgage broker.

Ok first off I am supposed to tell you to go see a lawyer and a CPA yada yada yada.  The truth is when you do they will all tell you different things so screw that.  There is lots of information out there if you know where to find it.  

First off how many loans do you have?   This is important if you choose the foreclosure route.  A short sale is ONLY better than a foreclosure if you don't go late on your payments.  I have a foreclosure and am still over 700 on my FICO. 

A signed lease will not help you if your property is underwater.  You will need enough income to pay both mortgages if you want to buy another house.  I know I did. 

Here is the deal.  If you only have one loan, that has been refinanced, then it is recourse.  Recourse means that they can sue you for money lost.  The deal is in California they never do it because California has a "One action rule".   What that means is the lender either decides to sue you or they just take the property back.   They always just take the property back.   Now if you have more than one loan then the second has the right to go after you much like a credit card could. 

Now if you let the house in California go now you will not have to worry about capital gainsm if it is your primary residence.  You will have to worry about income taxes on the money that was loaned. 

Of course there may be things I don't know about but if it were me I would try and purchase another property in Washington.  I would then either rent the California property out or simply let it foreclose.  You do have income taxes to worry but it may be possible to avoid them if you are insolvent.  Either way they will be much less than the amount you are underwater on your current house. 

Now you need to talk to a really good tax person yada yada yada. 

Congratulations on your transfer! Washington is one of Gods gifts to the American people (Right after California)

If you short sell, You can buy again the day after. But not usually with conventional financing. 
Heck, there is ZERO law that says you are not allowed to purchase a home again after a sale, a foreclosure, short sale, or eviction. 

The only issue is financing.

As to Leasing out the property

For Highland, if you can handle the mortgage, I would suggest renting out the property and holding out the storm. (Disclaimer, We have a large Property Management and Leasing Co in the East Valley in that region, so my opinion is slightly skewed towards leasing the property out).

You may even wish to hold on to the property as a rental property. OR devise a method to Lease Option out the property (a very high demand item) and if you get someone who knows what they are doing, it can be a win win for the buyer/lessor, and you as if negotiated properly, you end up with more money at the end of the sale in X years once the option is executed.

If you do decide to Lease Option out the property (Again, I am skewed, as this is a specialty of our office) you will want to choose an agent that isn't afraid of that idea and is willing to give you a full work out sheet to see if it ends up to where you can "Eat your cake and Have it too"
When structured properly, you also remove the whole issue of the Tenant-Landlord relationship as the person leasing the property is merely doing so to finance a future purchase at the end of the term.
You can collect more in "down payment" than you can legally collect in deposit. And par for par, you tend to get a lot more in "Rent" - Again, if structured properly.

Godspeed!

You probably need to take the path of least personal and emotional pain!  You have received some pretty good advise below.  RE agents can't tell you (or should not tell you) 'what' to do, but some of the below suggestions are reasonable ideas.  Leasing does offer you some advantages:  1). It allows you time to let the market respond .... one way or the other, 2). It does provide some additional income / tax write off's and 3). You may find another alternative once you have moved, settled into your new home and job that best fits your circumstances in say 12 to 18 months. In other simpler terms ...... it buys you some 'thinking' time.

However, in the end the decision should be based on my starting comment ...... minimize your personal and emotional pain by making a decision based on all the facts (list all the pro's & con's on paper and review them) and then go with your 'gut feel'.

Best success in you coming move, new job and ...... decision!!