5 THINGS YOU NEED TO KNOW BEFORE BUYING/SELLING THE ASSIGNMENT

1. The first step for the Assignor (seller) when you are considering assignment

Checking with the Builder if they allow you to assign and under what conditions and restrictions. Check your Purchase Agreement under the section called "assignments". 

Warning: Builder Agreements seem to imply that if you meet their assignment rules but they reserve the right to deny you this option if they so choose. So we strongly suggest that you can check with the builder and ask the procedure firstly.

2. Benefits for Assignor to SELL the Assignment:

  1. No Final Occupancy Deposit (5%-10% or more) on the date of Interim Occupancy if assignment occurs prior to this date. Some builders will request 5%-10% deposit on the Occupancy Date.

  2. No Interim Occupancy Fees (often 3-12 months or longer) plus Hydro (usually) and Condo Insurance costs.

  3. No Builder Final Closing Costs which including Development Charges/Land Transfer Tax/Lawyer fee...

  4. No HST Rebate qualification. This becomes the responsibility of the Assignee.

  5. Return of all Assignor Builder Deposits

  6. Earning Profit over the Price you paid the Builder

  7. Retaining your First-Time Buyer Status. If you are a first-time buyer, you would retain your status for the next purchase (assigning means you do not take the title so you still qualify) and be entitled to the credits when you do buy and take possession of another property at some later date.

3. Benefits for Assignee to Purchase the Assignment:

  1. No need to wait for a long time which the assignment be 3-7 years sooner than buying new (pre-construction) from the Builder. 95% of pre-construction has substantial delays in reaching Occupancy and Final Closing dates.
  2. Brand new unit - often never occupied/never rented. Fresh and clean (no pet, smoking, cooking smells, bad decor).
  3. All new warranties (manufacturer's 1-year on appliances and 1 & 5 & 7-year Tarion).
  4. The PDI (pre-delivery inspection) has usually been completed. In some cases, you may get to do this.
  5. Usually the prices is below the market value (compare to resale and pre-construction).

4. Assignments VS. Resales - Harder or Not?

Assignments are much harder to sell than existing properties (resales) or New (pre-construction) from Builders (on-site sales centre and soft music/site layouts, etc). With Assignments, the condo suite is often still not occupancy so potential buyers cannot see the unit. Sometimes, assignments take place during interim occupancy so they can be shown to potential buyers.

Also, Builders will usually not let you advertise the assignment on MLS and technically restrict the use of all advertising such as Kijiji, Facebook and other Sotial Medias. They don't want you to compete with their remaining units. Thus, you need a professional team like us whom are experienced with assignment sales and have developed a large client network to match a buyer and a seller together.

5. Are Assignment investments risky?

All investments have risks.

Real estate investments are less risky than many other investments because you have more choices than just selling. If the market has been good since you placed your deposit money, you can assign and take your profits. If the market has not been good, you can move in or rent it out and sell later if you wish. Time and market growth are the two major factors determining your profit.  

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