If you could guarantee a buyer that they would not loose money if they bought today would it help you close more deals? Then you need to know about EquityLock Financial. Fed Chairman Ben Bernake and Robert Shiller of Yale endorse a concept called equity protection. More than 20 years of research have gone into equity protection research.
People don't go into business to loose money. The smartest brains in the world have determined the improbability of an equity decline over the next 10 years. The geniuses believe that equity will not decrease and that there is a significant possibility of no decline or an increase in equity values for homeowners. 20 years of research went into the evolution of equity protection; Robert Shiller and Ben Bernake endorse the protection. Do you?
EquityLock started offering Home Price ProtectionTM plans nationwide to sellers and buyers in 2008. It's not really insurance according to the agencies that regulate insurance, but it looks, sounds and feels like insurance. Or, maybe a hybrid cross between buying puts and stops and buying insurance. The Department of Insurance Regulation doesn't have a category for what EquityLock does and categorize the service as closer to ID theft protection than to insurance.
EquityLock is bonded and insured. 53% of every dollar of premiums goes into an account with Chase to pay premiums to sellers and buyers. EquityLock is covered by reinsurance company RenaisssanceRe just in case there is a catestrophic event. The insurance that EquityLock buys is sold basically the same way that mortgage backed securities are sold.
A sale triggers payment. Premiums range between 2% and 3% of the purchase price. The premium is based on 4 factors:
• Market volatility
• Length of time policy covers
• Lockout period
• Home Price Index
EquityLock calculates the premium is based upon market volatility in your area. The US is divided into 386 metropolitan areas and you get grouped into the nearest area. Your premium is also based upon a quarterly government formulated housing indicator that tracks 386 metropolitan areas. Your premium is also based upon your Lockout period. The Lockout period is the period when you can not sell your house and collect a premium. The Lockout period ranges from 18 to 36 months. An easy way to remember this is, "The longer the Lockout the lower the premium." The premium is based upon the length of time covered. A 4 year policy costs less than a 10 year policy. EquityLock won't cover more than 10 years. If you look at the history of home appreciation it seems like the premium should be reversed and that a short policy should cost more than a premium for a policy for a long period of time, but let's not tell EquityLock that. The premium is also based upon the percentage of market decline when you sell your home compared with the Home Price Index.
Can your buyer get that piece of mind for free? Share the information and see what your buyer thinks. If your buyer is worried about the market and thinks prices will fall your buyer can purchase protection. If your buyer believes we are at the bottom and protection is a waste of money isn't that a vote of confidence in the current market? EquityLock protection may be enough to logically give a buyer confidence to buy today.
What's the catch?
You have to keep the home for 18 to 36 months depending upon your area and the risk. The risk is based upon homes devaluing 50% and a "mobility rate" of 7.2%. The mobility rate is rate of homes selling in your area. Coverage goes up to 10 years. Your pay out is proportionate to the home price decline. If you pay 1,000,000 for a home and sell it 10 years from now for $900,000 or 1.2 million it doesn't matter. If the home price index in your area has fallen 10% EquityLock will pay the homeowner $100,000 based upon the 1 million sale price mulitiplied by the 10% decline. Pretty cool, hu?
Want a better reason to provide this service to you client? If the home price index falls by 10% and your client is able to sell without loosing any money the policy will still pay your client $100,000.
For more information go to http://www.equitylockfinancial.com/disclosure.html or call (800) 401-9290.
Maya Thomas
Exit Realty Old Island Key West
1511 Truman Avenue
Key West, FL 33040
(305) 522-1398
www.ShowcasePortfolioProperties.com
MyRealPro@gmail.com
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You're right on the money! We want to build back buyer confidence in this skittish real estate market. Incentivizing buyers with protection for 10-15 years is better than a new countertop! (and cost the same or less!)
Good luck with everything in the Keys!