Renovation Adjustments
What Is a Renovation Adjustment?
If you renovate your home while an HEA or HEI is active, some providers will exclude the value your renovation added from their share, so you don't end up splitting profit on money you spent yourself. We use "renovation adjustment" as the general term for this on our site — it happens to match Hometap's own name for it. Unlock calls the same thing an Improvement Adjustment, and Unison calls it a Remodeling Adjustment.
How It's Calculated
The adjustment is based on what an independent appraiser determines your improvements added to your home's value at settlement, not what you spent on the project. Those two numbers are often very different.
Worked example (based on Unlock's published methodology): You enter an agreement with a starting home value of $700,000. Soon after, you spend $50,000 remodeling your kitchen and bathrooms. Ten years later, you sell for $900,000. An appraiser determines your renovation added $40,000 to that sale value.
- Ending home value$900,000
- Improvement adjustment−$40,000
- Value the provider's share is based on$860,000
Why Appraised Value Can Differ From What You Spent
Renovations don't add value dollar-for-dollar, and some depreciate over time. A bedroom or bathroom addition might add roughly 80% of its cost in appraised value. An in-ground pool might add closer to 20%. A kitchen remodel can fully depreciate over enough years as appliances and finishes wear out and the style dates. The appraiser is valuing what your improvement contributes to the home's price today, not reimbursing your receipts. The adjustment can end up well below, at, or in rarer cases above what you actually spent.
What You'll Need to Qualify
Providers that offer this adjustment generally require:
Typical Requirements
- An independent appraisal at settlement to determine the value added
- Documentation — before/after photos, permits, and a description of the work
- Compliance with local building codes and any required permits
- A minimum improvement value to qualify at all — Unlock's threshold is $10,000 in added value; other providers may set their own
Exact documentation requirements and minimums vary by provider — check your specific agreement.
How the Terms Differ by Provider
The three providers that offer a renovation adjustment don't apply it the same way. Here's how each one's minimum, waiting period, and requirements compare:
Figures are what each provider has published — always confirm current terms directly with the provider before relying on them.
Which Providers Offer This
Of the providers we track, three offer a version of this adjustment and two don't:
Terminology and exact rules vary by provider — see each provider's page for details.