Layoff protection offered by Alberta condo project to increase sales

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Alberta developers offer layoff insurance to prospective homebuyers
WATCH: Alberta homebuilders are being forced to get creative with incentives to sell units in the province’s slumping real estate market. Reid Fiest explains what kind of offers developers are promoting – Mar 16, 2016

For the first time in a generation, new Alberta condos and homes sit ready and waiting for buyers to move in.

It’s a big shift in the market and has builders like Calgary’s Carlisle Group thinking creatively about who to get customers into a show suite.

“That’s the number one challenge… just getting people out of their home, reading all the doom and gloom,” Jim Bryce of the builder said.

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It’s why the longtime developer is offering what it calls the job security guarantee – essentially, it’s layoff insurance.

Buyers fearful of losing their job buy some piece with of mind with a condo purchase for the rest of 2016.

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“We will pay your mortgage, up to six months or to maximum of $8,000,” Bryce told Global News. “That includes both your mortgage and condo fees.”

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Incentives are the name of the game right now.

While prices are stable, the number of sales is way down as unemployment continues to rise in Alberta.

READ MORE: 4 dos and don’ts of buying your first home

Wanda Palmer of Trico Homes says it launched its Red Card incentive program last month to attract more customers.

“The biggest impact for us is consumer confidence,” Palmer said.

The rebate incentive ranged from $10,000 on a condo purchase to $120,000 on a upscale home valued close to $800,000.

“They can take it off the purchase price of their home, they can spend it in the design centre, on options and upgrades,” Palmer said. “They could use it for legal fees.”

Generous offers like these are almost unheard of in Alberta, according to Steve Sedgwick, president of the Realtors Association of Edmonton.

“Over the last year and half we’ve had a lot of political and economic uncertainty and that’s affecting buyers decisions,” Sedgwick said.

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Some wonder why builders simply won’t cut the sticker price on a home, as opposed to offer incentives.

Builders say they’re simply covering their costs.

And while construction costs may be down with more availability of trades, some other factors are out of their control.

“That’s things like the Canadian dollar,” said Palmer. “A lot of the materials that go into our homes are purchased down in the U.S.”

It’s one more challenge in a real estate waiting game with no end in sight.

But, some sellers hope sweetening the deal with some extras may get some of their properties sold.

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