Abstract: A system and method for managing the risk for prospective real estate property buyers of price volatility in the real estate market in which they intend to purchase a property, without the need to make an immediate purchase. Data is input into a computer system and the computer system is used to prepare a Participatory Equity Appreciation Contract or “PEAC” which grants the prospective property owner, in exchange for a fee, the right to receive a payout, calculated as a function of the deviation of the real estate index of the geographic area in which the prospective purchaser intends to purchase a property, upon the earlier of: (i) the end of the term of the contract, or (ii) the occurrence of a life event such as the time the prospective purchaser actually purchases a property in the area. The prospective property owner can only receive the payout upon occurrence of a life event such as the time of purchase of a property in such area, which may be later than the end of the term of the PEAC.

Abstract: A method of managing the risk of uncertainty of the future price levels of real estate property pursuant to a Back-End-Loaded Participatory Real Estate Equity Protection Contract or “BPREEPC.” One part of the invention grants the property owner the right to receive compensation in the event of a decline in the real estate index of the metropolitan area where the property is located. The property owner can only exercise this feature of the invention upon sale of the property to a third party. The amount of compensation equals a proportion of the value of the property as appraised at or about the time of the purchase of the put option, where the proportion is determined by the proportionate decline of the real estate market index, and where the amount of compensation may be capped at a certain amount.