These policies pay you directly upon the sale of your home if the equity declines below the local house price index (FHFA) from the time of purchase. Naturally all these policies have fine print and terms.
The terms and condition’s of these polices vary, but most protect for at least fifteen years and require an arms length transaction. There is a twenty four month waiting period before you could collect on any loss at the time of sale. These policies also vary in cost and the how they’re paid. Here’s a link to a “Questions and Answers” page of one such company.
Price protection policies are new to the market and I’m going to monitor their demand and success closely.
I strongly feel if you hire a professional realtor who knows the current market and its corresponding data will do more to secure your investment than any price protection policy can ever accomplish!
Call me if you have any questions or want to discuss real estate!