There are many schemes offered by a variety of companies that will help you protect real estate values.
The scheme enclosed allows you to lock in your property’s value at its current value even if property prices fall.
How do these schemes work? Let’s find out.
What is locking in value?
The price, at which you lock in your property, is the value you locked it in at and is the minimum price you will receive for it you will receive for it, should you decide to sell it.
Locking in the value of your property at a specific minimum value has advantages for homeowners.
The concept is simple, provides protection of value (for several years), peace of mind, and comes at an affordable cost.
Set value or a Profit
You therefore have a guaranteed value for your property even, if the market declines. If on the other hand your real estate value rises you can make a profit to.
The option on your locked value can then be exercised at your discretion should you decide to sell it.
In the event that home prices decline and you decide to sell, you may exercise your option. If house prices rise, you will probably choose not to exercise your option. It is up to you what you do.
Assume you are a current homeowner and your house is worth $500,000.
You wish to ensure that even if property prices falls in value, the amount you receive for your property will never be less than $500,000.
You therefore have “locked-in the value" of your property.
In exchange for a small fee you have an option to sell the property at an agreed price. Which will have locked in the real estates value.
There is no obligation to sell the property within the period, at all.
Periods are normally 5 – 10 years
A profit or a set price.
If say in three years time you want to sell your house, and you are offered $600,000, you could accept the offer and make a profit.
If prices drop, and in three years time the best price you can obtain is $400,000, you can still sell it for $500,000 at the lock in price.
Peace of mind.
These schemes are becoming more popular as the outlook for property prices looks more uncertain.
Homeowners know if prices rise they can make a profit and if prices fall they have locked in a value.
In the event of price falls, other properties will have dropped in value.
Homeowners can then buy an equivalent property cheaper and bank the extra money, or buy a better property with the money they have locked in.
Take a look at these schemes and the prices and you will see they are good value for money for the flexibility and peace of mind they offer.
These schemes are a great tool for homeowners to ensure they don’t lose and if they move in a falling market the benefits are great.
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