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ASSIGNMENTS AVAILABLE WITH MIB
Assignment
affordable green villa
Assignment
affordable green villa
Assignment
affordable green villa
Assignment
affordable green villa
Assignment
affordable green villa
Assignment
affordable green villa
An Assignment Sale in the Pre-Construction Market
Simply put, an assignment sale is the sale - or an "assignment" of a contract to purchase a pre-construction condominium suite. An assignment sale is usually applied to the pre-construction condominium that has not been registered yet, so no one can take ownership of the unit itself. Only the contract can be sold.
When you purchase a pre-construction condominium unit, you will be given an assignment clause/right in the form of a contract. You can choose to sell your assignment before the condominium is even built.
Once the building has been constructed and registered by the city, the ownership will be transferred to the buyer. Until then, it’s just the sale of a contract, but as you will see, there are many advantages to these kinds of sales for both the buyer and seller.
How Assignment works
In 2017, John Smith buys a pre-construction condominium suite from ABC Developments for $400,000 with a total down payment of 20%, equalling $80,000. The project is set to be completed in 2022.
In 2021, John discovered he will be relocated to a new city. He can’t afford to buy a new home while holding onto his pre-construction condo.
Fortunately for John, the assignment clause allows him to sell the contract for his unit before the building is completed and registered!
John has decided to sell the contract to his unit to Jane Doe. Due to the changes in the market, he was able to sell the contract for $500,000.
Assignment Purchase:
- Assignment Agreement: $500,000
- Original Purchaser (Assignor) = John Smith
- New Purchaser (Assignee) = Jane Doe
- Vendor (Builder) = ABC Developments
Assignment Purchase Price by John Smith to Jane Doe = $180,000, due immediately. This includes a deposit of $80,000 + profit $100,000. The amount and timeframe for this payment can also be negotiated.
- In 2022 when the building is complete and ready for interim occupancy, Jane Doe will move into the unit during the occupancy period. At this point she will begin paying occupancy fees to the developer. These fees take the place of mortgage payments and condo fees until the building can be registered.
- Interim occupancy happens when the city has designated the property as safe to live in. The building will be officially registered once the municipality does a final inspection. Jane Doe can occupy her suite in the meantime until the building is officially registered.
Assignment Details:
- When the building is officially registered by the city, the official title transfer takes place between the developer and the new purchaser. Jane Doe can finally register a mortgage and start paying her mortgage payments and condominium fees.
- Funds required to complete the sale by Jane Doe to the builder = $320,000
- Jane Doe now has all the rights to the property, just like any homeowner. Any future re-sale of the property will consist of a regular real estate transaction.
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