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Homebuyers Get Price Protection in Slowing Market
A developer in Canada is offering a temporary refund program for homebuyers who purchase preconstruction homes that experience a price drop before their closing date.
This limited-time offer is available to eligible buyers in select regions, specifically Ontario and Alberta, and includes condos and low-rise homes in various communities. The program, called the “Price Protection Program,” ensures that homebuyers will receive a refund for the difference in price if the value of their home decreases after the purchase agreement, but prior to closing. The policy applies to a range of communities in Ontario, including the Greater Toronto Area, as well as areas in Alberta.
The process is straightforward: if the price of a property drops within 30 days of closing, the buyer will be reimbursed the difference, with the calculation based solely on the base price of the home. This policy does not account for upgrades or premiums added to the home’s price, and it focuses specifically on comparing the same base model in the same neighborhood.
The initiative is intended to give potential buyers more confidence in purchasing a home amidst market uncertainty. With a slower housing market in Ontario and declining sales, particularly in the Greater Toronto Area, the policy aims to attract hesitant buyers who may be worried about future price drops.
Industry experts have mixed opinions on the effectiveness of this program. While some see it as an innovative marketing tool to stimulate demand in a sluggish market, others believe it may be more of a publicity stunt. The policy’s fine print specifies that the protection only applies if an identical model in the same phase drops in price, meaning fluctuations in the overall market are not covered.
Despite some skepticism, the program resonates with buyers who are more focused on long-term homeownership than short-term market fluctuations. Developers see it as a way to incentivize buyers, particularly those looking for stability in uncertain times.
This offer is currently set to end on March 8, though interest in the program has been strong, and the developer has hinted that future discussions may take place to determine if it will be extended or expanded.