How does the program work?
Home Price Protection™ provides financial protection to homeowners in the event their local market index value declines at the time they sell their home,regardless of the price the home is sold for.
Is this insurance?
No. It is a financial agreement to pay the homeowner upon resale if their House Price Index drops. The contract is not purchased to insure against the loss of value in a particular real estate parcel; rather the contract pays out based on declines in the relevant market index, regardless of whether the home sells for a gain or a loss. A Home Price Protection™ agreement holder cannot have an insurable interest in the House Price Index. In order to provide consumers the confidence they deserve, we insure our risk with a Washington, D.C. insurance company which provides regulation on our pricing, capital and reserve requirements at levels sufficient to cover operations and expected claims.
Who can sign up for this program?
Anyone who is a homeowner or who is buying a home can purchase a Home Price Protection™ contract from EquityLock Solutions. Anyone who is selling a home can agree to purchase Home Price Protection on behalf of their buyer.
How much does it cost?
The national average is currently 2.05%. For a home worth $200,000, the one-time cost would be about $4,100. We offer multiple payment options from a onetime payment up to 60 month financing options.
With RE/MAX we offer special pricing and the cost for RE/MAX clients ONLY is 1.75% of the purchase price and can be financed over a two year period at zero percent interest.
When can I file a claim?
Upon the sale of the home after a 2-year waiting period from the time of enrollment and if the house price index in your area has gone down since enrollment. Protection is available for a maximum of 15 years.
Why is there a waiting period?
There are several reasons why we chose to impose a waiting period. The program is intended to encourage homeowners that are committed to remaining in their home for the long term, rather than as a speculative financial tool. Second, home price movements can be somewhat predictable over the short term, but over longer periods, the predictability is reduced. The waiting period prevents a situation where homeowners will increase their protection at times when the market is weak, impacting the sustainability of the program.
What if the homeowner loses more money upon reselling the home than they get from the Home Price Protection™ payment? What if they make money upon reselling the home, but the index has gone down?
EquityLock Solutions will make a payment only when there has been a decline in the market index and only for the percent change in the index, multiplied by the protected value. Because the index represents the average performance of home prices, some people will experience losses greater than the decline in the index while some people will experience losses less than the decline in the index. It is possible that a homeowner could sell their house at a profit but still receive a Home Price Protection™ payment if the index has declined in their neighborhood.
How is payment made in the event of a claim?
Upon reselling your house, we look at the change in your market index. If there was a drop in the market, we pay for any difference, up to the contract maximum of 20%.
If you’d like more information on this exceptional program please contact us at info@morganhomes.com or call (650) 508-1441.
Disclaimer:
Drew & Christine Morgan are REALTORS/NOTARY PUBLIC in Belmont, CA. with more than 20 years experience in helping sellers and buyers in their community. They may be reached at (650) 508.1441 or emailed at info@morganhomes.com.
You can find them on Facebook and also on Twitter.
The information contained in this article is educational and intended for informational purposes only. It does not constitute real estate, tax or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario.
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