- An agreement between multiple buyers where one buyer inhabits the property and the other buyer has an ownership stake as an investment. The partners split the capital gain after the property is sold.
equity sharing, shared equity partnership, shared ownership
Related Terms and Acronyms
- Capital Gain (CG) — Acronym, Important,
- The profit made by the seller when real estate or other capital assets are sold. Capital gains are taxed more favourably than earned income. However, this can be dependent on your tax bracket and the length of time you owned the asset before it was sold. You could pay approximately one-third to one-half less tax than you would pay on the same amount of earned salary.
- Closely Held — Definition,
- Schedule II banks may be closely held, i.e., one party (owner) may hold more than 10% of the outstanding shares. Schedule I banks are prohibited from this type of ownership.
- Closing Date (cloda) — Abbreviation,
- The date a buyer takes possession of a property title.
- Conditional Sale (C/S) — Acronym,
- An agreement between the buyer and seller in where certain conditions must be met before the property sale can be finalized.
- Home Equity (HE) — Acronym, Very Important,
- The part of a home's value that the mortgage borrower owns outright; the difference between the fair market value of the home and the principal balances of all mortgage loans.
- Investment — Definition,
- Something you put your money into in order to make money.
- Private Equity — Definition,
- Equity not traded on a stock exchange.
- Shared-Appreciation Mortgage (SAM) — Acronym,
- A home loan in which the lender offers a below-market interest rate in exchange for sharing in the profit when the home is sold. Usually done only with private funds/lenders.
- A mortgage loan where the lender or a third-party backer agrees to offer a highly reduced mortgage rate to the borrower in exchange of sharing profits when the property is sold.
- Title — Definition,
- Evidence of a person's right to possession ownership of a property.