![]() Say that at the end of six years, you find your home is worth $600,000. Unison accounts for this possibility, which we’ll cover in a moment.īut first, let’s look at what happens when your home appreciates in value. Of course, failure to maintain the property could lead to a significant decrease in value. Subtract this from Unison’s $50,000 initial investment to arrive at $35,000 - the amount you’d owe Unison. Keeping in mind that the Risk Adjusted Value of your home was $487,500, Unison’s share of the depreciation would be -$15,000 (40% of -$37,500). When you sell, your home’s value has dropped to $450,000. Going back to the previous example, imagine you own your home for six years before selling. Otherwise, you may pay Unison less than what they gave you. However, note that if you buy Unison out early, or if you sell your home within five years of closing on the deal, Unison will not share any losses on the home. You may owe Unison less than the amount of original co-investment if your home depreciates in value. If you move forward with Unison, you’re also responsible for third-party fees, such as appraisals and settlement fees. Note that Unison charges a 3% transaction fee - deducted from your initial proceeds - upon closing the deal. Original Appraised Value:Īmount you owe Unison (original co-investment amount + 40% of change in value): What you’ll owe Unison is 40% of the appreciated value of your home, based on your OAV. Imagine you sell your home 10 years later without any change in value. Let’s move on to the end of the agreement. So to sum up what we know at the beginning of the agreement: Original Appraised Value: So that’s the figure we’ll use in our example. In this example, since you’re taking 10% of the home’s appraised value today, the Investor Percentage will likely be 40%. This varies based on the co-investment amount you take, and it can usually be determined by multiplying the percentage of your home’s appraised value you receive today by four. You also know your Investor Percentage upfront, which is the portion of your home’s change in value you’ll owe Unison at the end of your agreement. This OAV doesn’t impact the amount you get from Unison upfront, but it will determine how much you pay them when the agreement ends. Original Agreed Value = Appraised Value – 2.5% There are no monthly payments and no interest charges on this $50,000.Īt the start of the agreement, you also know your Original Agreed Value (OAV). In this example, you get $50,000 in cash from Unison. Percentage of your home’s value you receive upfront: Say that an appraisal finds your home to be worth $500,000, and you’re looking for a co-investment with Unison of $50,000. (This is usually determined by multiplying the percentage of your home’s appraised value by four.)
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