SKYIRE HomePlan Fixed-Price Option
The Fixed Price Option lets you know from day one the final purchase price of your home. This price is determined by an analysis of the real estate market conditions in the area that you buy your home. Typically, the value increase per year ranges from 2.5% to 4% annually, but may be higher, depending on the market in which the home is located in. Once you have accumulated enough equity in the property and are ready to take title, the steps involved in exercising of your right-to-purchase is similar to the Marketed-Priced Option.
SKYIRE HomePlan Exit Scenarios − Fixed-Price Option
|1. The HomePlan tenant builds-up enough equity in the home to close in 4- 7years.||The HomePlan tenant would purchase the home based on the agreed annual rate of appreciation. The HomePlan tenant earns their share of the mortgage pay down and fully participates on any market value appreciation of the home above the fixed price. Typical real estate commissions would apply against the sale of the property and are paid out of the HomePlan investor’s profit in the transaction.|
|2. The HomePlan purchaser obtains additional funds and is able to close within 1-3 years.||Subject to the minimum one-year appreciation amount required to cover the HomePlan investor’s transaction costs, including transfer tax and legal fees, the HomePlan tenant would earn their share of mortgage pay down along with any potential market value appreciation in the home above the fixed price.|
|3. The HomePlan purchaser is unable to proceed at the end of the 7-year term of the agreement.||If the HomePlan tenant is unable to or elects not to proceed with completing the purchase at the end of the term they do not participate in the mortgage pay down or in the potential market value appreciation of the home. The home would be listed for sale and based upon the actual sale price (assuming it is above the original purchase price) the HomePlan tenant would have the opportunity to receive their contributed equity back upon the sale. The HomePlan investor has the option of matching the best offer received during the listing process and paying out the HomePlan tenant.|
|4. The HomePlan tenant needs to move prior to the end of the term and is no longer able to stay in the home.||The HomePlan tenant would be responsible for listing the home for sale (as they would be if they were already the owner) and would cover the costs and commissions of re-selling it out of their contributed equity. Depending on the price of the best offer received, the HomePlan investor has the choice of buying out the HomePlan tenant for the net amount after costs and commissions from that best offer. If the HomePlan tenant arranges for the sale without missing any normal monthly payments they are still eligible to exercise their right and receive the benefit of the mortgage pay down.|
|5. The HomePlan tenant elects to exercise their right to purchase but without closing based on having an alternative buyer willing to pay more.||In the case of a quickly rising housing market the HomePlan tenant is able to take advantage of their right-to-purchase by first finding a new buyer (by listing the property or other marketing efforts) and then exercising their right. The HomePlan tenant would get all profit above their contracted option price. Any commission payable from the marketing efforts the HomePlan tenant organizes is to be paid out of the HomePlan purchaser’s profit.|