In real estate finance, shared appreciation refers to an arrangement in which someone other than the buyer participates in the equity growth of a property. Under this type of agreement, the parties share certain expenses and also share in any increase in the property’s value when it is sold.
Shared appreciation arrangements are often used to help buyers afford property by reducing upfront costs in exchange for giving another party a portion of future appreciation. The specific terms, including how appreciation is calculated and divided, are defined by contract.
