Well, this post should be very brief as I want it to be more of a discussion. Today, I came across an article that talks about how you can guarantee yourself against the devaluation of your home. Basically, there is a product out there called Sirius Value Protection. The product is like a put option on stocks. It gives you the right to exercise the option to sell your home back to Sirius after eight years for the same price you bought it.
Most people are very weary of buying homes in depressed housing markets such as Las Vegas and Florida. This product supposedly will help ease the minds of weary buyers. For example, if you buy a house in Las Vegas tomorrow for $300,000, you don’t really have to worry if the price of the house falls. If the price 8 years down the road is $200,000, you can force Sirius to buy back your house for $300,000.
All of this comes at a fee though. Apparently the company wants to charge a 20% fee to homebuilders who are looking to get rid of their inventory. That’s quite a big chunk of change for homebuilders who are already so close to losing money on a home after they build it.
As many of you already know, my wife and I are in no position to buy. It is still going to be a few more years until we even think about a down payment or picking paint colors. However, I imagine some of you out there are shopping for a home right now buy are a little weary about the market.
Would you buy now knowing that you could recoup your money if things went even further south?
If you bought a home several years ago and are now upside down, would you exercise your option (if you had one) and sell your house?
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