1. (1) market value received from the sale or transfer of the residential property, or in the case of a sale or transfer that is not for market value, the appraised value of the residential property at or around the time of the disposition;

2. (2) less:

   1. (i) reasonable real estate commission(s);
   2. (ii) capital improvement(s) net of applicable depreciation; and

   3. (iii) the appraised value of the residential property determined on a date no earlier than 90 days prior to the date the parties entered into the shared appreciation agreement.

      (b) Limitation on holder’s share of appreciation.

      The holder’s share of the appreciation in value shall be limited to the lesser of:

3. (1) the amount of the reduction in principal (deferred principal), plus interest on such amount calculated from the date of the shared appreciation agreement to the date of payment based on a rate that is applicable to the modified mortgage loan; or

4. (2) fifty percent of the amount of appreciation in value as determined by subdivision (a) of this section.

   (c) Reasonable real estate commissions.

   A real estate commission is considered reasonable if it is customary for the services performed in the market area of the property being sold or transferred and calculated at rates generally used to determine such fees within the market area or such fee is calculated in compliance with rates established by State or Federal laws and regulations for calculating such fees.

(a) Calculation of appreciation in value.

Appreciation in value of the residential property shall be: