IFG Ireland have recently launched Home Price Protection, a new product which protects your new or secondhand home against financial loss or negative equity.
IFG claims the plan removes the uncertainty around whether or not a buyer or seller should make a move on the property market.
They say it protects home buyers from financial loss of up to 20% of the price paid for the property, if, by the end of a designated period, the value of their property is deemed to be lower than the price they paid for it.
Frank Ryan, chairman of IFG Ireland, said: “Our research indicates that a critical factor deterring potential purchasers from buying in Ireland today is the fear of further falls in property values but IFG’s Home Price Protection product has been designed to overcome that fear.
“At no extra cost to the consumer, Home Price Protection will remove some of the uncertainty around decisions to buy a new or second hand home by protecting buyers against financial loss if, within a designated period, the property is deemed to be of less value than the purchase price.”
When a property is registered under the plan, the seller agrees to defer receipt of a portion of the purchase price until a fixed period of time has passed.
The purchaser’s solicitor then places the protected amount into an independently administered trust bank account, held under the control of IFG. After the protected period has passed the trustee will independently determine if the seller still qualifies to receive the protected amount or if any portion should be reimbursed to the purchaser.
Home price movement will be exclusively determined by reference to the Residential Property Price Index as provided by the Central Statistics Office.
For example, if a plan is set up to protect 10% of a purchase price, then the seller would receive only €270,000 of a €300,000 sale now, with the remaining €30,000 paid into a Trust Bank Account.
Mix adjustments are possible so that at the end of the protection period, the money in the Trust Bank Account is split in equal or varying percentages between the buyer and the seller, depending on how much the property’s value has decreased by.
For further details on the scheme visit www.homepriceprotection.ie or email info@homepriceprotection.ie
A list of estates agents who will be approved to provide this product to vendors is currently being compiled by IFG also.
