Shared-Equity Transaction

A shared-equity transaction is a simple form of shared ownership. Two buyers purchase a property, for example, and after the purchase, one stays on as a resident while the other becomes the investor. At this point, the party who occupies the property is responsible for mortgage payments, property taxes, insurance and routine maintenance. Under some agreements, major repairs and improvements would still be shared by the two parties. When the property is sold, the profits are split between the owners depending on predetermined percentages. For example, one person may already own a home. Another party could enter into a shared-equity transaction with a down payment and new mortgage. Ownership percentages would be agreed upon. The new party would occupy the property and take over monthly payments and upkeep. After a specified time frame, the new party could buy themselves out of the agreement or sell the property and split the profits based on the ownership percentages.