What is an assignment?

Pre-construction real estate can be a great investment, but working with assignments can be very complicated. In this article, we'll go over what an assignment is, along with all the small details you need to know.

An Assignment can be a complicated transaction and is a very niche market, so it is important to have a Broker on your side that is very experienced in Assignment transactions.

A big part of my business is in working with Assignments and Investors. In addition I am an investor myself and have successfully Assigned dozens of my own units.

WHAT IS AN ASSIGNMENT?

A Condo Assignment is a legal sales transaction whereby the Original Purchaser (the “Assignor”) of a property sells, and thereby transfers, their interest and obligations under the original contract to a new Purchaser (the “Assignee”).

There are Some Major Advantages of Buying or Selling Assignments

ASSIGNORS(Sellers):

  • You can sell before your building is complete and you have to take out a mortgage
  • Can save you money on; closing costs, occupancy fees, land transfer taxes

ASSIGNEES(Buyers):

  • Saving on Land Transfer(depending on when the assignor bought the unit)
  • May still be able to select your own finishes, colours & upgrades
  • Can inherit extras such as credits on closing and may also benefit from GST/HST credits.
  • Buy below market value

ASSIGNING YOUR CONDO

Most builders do allow condo assignments in Toronto, there are however some rules in the original agreement that sometimes have to be followed. Even with strict rules in place there are other options that are available to you.

MARKETING ASSIGNMENTS

Because Assignments for the most part cannot be advertised on the MLS it is important to have a solid marketing plan in place.

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Have any questions?

How much is my pre-construction condo worth?

The value of pre-construction is typically determined by looking at the current pricing of assignment units trading the building, new construction sale prices of newer resale units in the surrounding area. Typically pre-construction condos closer to completion are more attractive to end-users who are prepared to pay a greater premium over the initial contract.

How do I get out of my pre-construction condo?

In order to get out of your pre-construction condo you can assign the unit to another buyer with the consent of the developer. In many cases there are restrictions on how you can market the property, In most cases you are not allowed to list it on MLS. You can sell it quickly to an assignment buy investors like One Day Assignment or you can try and find your own buyer. It is important to make sure that you are within the development guidelines set-out in the Agreement of Purchase and Sale or else you can void the agreement and lose your deposit.

Will I lose my pre-construction deposits?

Assigning a condo will typically have the Buyer (assignee) replace the Seller’s (assignor’s) deposit and have it credit to them as part of the deal. Profits may be realized at the time of assignment but most commonly the majority will come at final close.

Looking to sell it yourself? Read these first.

Apr 27

How do you sell a pre-construction condo?

Since the condo isn’t registered or “complete” you technically don’t own it yet you can’t something you don’t own. So really what you are “selling” is the contract to buy the contract from the developer through a transaction called an assignment.

Read More
Apr 27

Assignments 101: How do assignments work?

An assignment is the sale of a contract of purchase and sale to a third party. The most common kind is condo assignment. A purchaser buys a condo that isn’t going to get built for 5 years from a developer.

Read More

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