What is an Assignment Sale?
An assignment is a sales transaction where the original buyer of a property (the “assignor”) allows another buyer (the “assignee”) to take over the buyer’s rights and obligations of the Agreement of Purchase and Sale, before the original buyer closes on the property (that is, where they take possession of the property). The assignee is the one who ultimately completes the deal with the seller. In other words, an assignment clause allows the buyer of a home to sell the place before they take possession of it.
In Ontario, assignments are more common in pre-built homes and condos than on re-sale properties, but they are possible on any type of trade.
- Get a Great Real Estate Deal Negotiate significant savings in comparison with resale and other pre-construction condo units.
- Buy New Home Move into a brand-new home never lived in with full warranty.
- Move-In Faster Don’t want to wait years for the condo to be built? Purchase and move into your new dream home in just weeks or months.
- Seller Gain Liquidity Need or want to sell your condo before you close? Access cash and diversify your portfolio by selling now.
- Avoid Closing Costs Save time and thousands in closing and mortgage costs.
- Help Your Buyers If you have clients looking to buy, take a look at an assignment sale, you may save them thousands of dollars.
- Help Your Sellers If you have clients in need of selling fast, an assignment sale can provide the liquidity they’re looking for.
- Certified Confidence Trusted network of legal professionals to ensure a rigorous and upright process for buyers and sellers.
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Pre-Construction Assignment Sale FAQ
Q: Why do Assignment Sales Occur?
A: Because it usually takes several years to completely build a pre-construction condo building or new home, things in someone’s life can change during that time leading to them no longer needing or wanting the home.
Q: Are Assignment Sales Legal?
A: Yes, assignment sales are legal. Developers will usually include a clause within the original Agreement of Purchase and Sale.
Q: Who is the Assignor?
A: The Assignor is the original purchaser of the Agreement of Purchase and Sale from the developer.
Q: Who is the Assignee?
A: The Assignee is the purchaser of the Agreement of Purchase and Sale from the Assignor.
Q: What is the Assignor Responsible For?
A: The Assignor will usually have to pay a small fee back to the developer and a legal fee if they choose to assign their purchase. These costs will be outlined within the Purchase of Agreement and Sale. Also if for some reason the Assignee does not close the sale at final closing. The Assignor may still be on the hook for the contract.
Q: What is the Assignee Responsible For?
A: The Assignee is now responsible for any and all fees and charges related to the contract; deposits, charges, occupancy fees, closing costs, etc.
Q: How does an Assignment Sale Benefit the Assignor (Original Purchaser)?
A: Depending on how much time has passed and how much the land has appreciated the Assignor may make a profit off of his original purchase.
Q: How does an Assignment Sale Benefit the Assignee (New Buyer)?
A: When the Assignee takes over the contract for the home in question, they will inherit any incentives that were included with the original purchase and will not have to wait years to move into a brand new, never lived in home.
Q: Should I Seek the Advice of a Lawyer During This Process?
A: Whether you are the Assignor or Assignee, it is always essential to seek the expertise of a lawyer that specializes in real estate to look over any and all paperwork and contracts and help you navigate through any legal jargon you may not understand.
Q: Where Can I Find Available Assignment Sales?
A: Most Assignment Sales won’t be found through MLS listings, so if you are interested in finding your dream home through an Assignment Sale, your best bet is to contact a Pre Construction Projects Certified Expert today. We specialize in preconstruction builds and are thoroughly educated in Assignment Sales and can answer any questions you have.
Q: What is RECO doing about assignments in Ontario?
RECO is continuing to monitor this issue and if a registered real estate professional breaches the rules, they would be pursued to the full extent of the law. In addition, RECO has asked its inspection team to watch for anything unusual related to assignments.