Philadelphia Weekly

REAL ESTATE

Franchisors offering buyers 'Home Price Protection'

Payouts tied to market index instead of individual properties

By Inman News Feed

Add Comment | Comments: 0 | Posted Nov. 4, 2011

Brown gives this example: Prices in certain neighborhoods have fallen 5 percent and the Realtor tells the homeowner, maybe he should cut his offering by 6.5 percent to be competitive. The homeowner has to ask himself: Do I really want to drop the price another $12,000 on a $200,000 house?

"The other option is, the Realtor can offer up to 1.7 percent compensation to a buyer to purchase Home Price Protection," Brown said. "To make it even more competitive, the Realtor said, 'Let's just cut the home price 1 percent.' Now they are looking at a drop of 2.7 percent as opposed to 6.5 percent and they have something tangible to give to the homebuyer.

"This particular product answers the challenge of consumer confidence," Brown said.

EquityLock Solutions is not trying to promote a product that allows people to game the system or make a bet on the market, Agresti said. "What we are trying to do is provide people with the stability that said, 'I want to move into this house. I'm going to stay in the house a normal amount of time. And, I'm not going to do that unless I get some protection from another market correction.' "

Steve Bergsman is a freelance writer in Arizona and author of several books. His latest book, "Growing Up Levittown: In a Time of Conformity, Controversy and Cultural Crisis," is now available for sale on Amazon.com.