01 Jan Toronto Condo Assignment Guide – Buying & Selling
What do you do if you wish to buy a condo by a top developer only to find that all condos in your chosen area have been sold out? Even if you discover that condos you wish to own are sold out, you can still buy them with condo assignment. That is possible with an ‘Assignment of Agreement of Purchase and Sale’ or what is also known as ‘flipping a home.’
What is an Assignment of Agreement of Purchase and Sale?
A buyer has bought a new condo but due to some reason (change in job, marital status or wish to make a profit), he decides to sell the condo to somebody else. The original buyer can then legally assign the condo to a thirty-party buyer through ‘Assignment of Agreement of Purchase and Sale.’
Why does the third party buyer buy from the original buyer?
There can be various reasons for entering into such an agreement. Mostly, when a buyer cannot find a desirable condo from the condos available for sale, the second best option is to find a person who is looking to sell his or her newly purchased condo. A buyer may want to buy a condo only in a certain area due to proximity to job, school, elderly parents, etc. Unavailability of condos for sale in that area can force them to buy from an original buyer, even at a higher price.
Why does the original buyer sell to a third party?
Since there are buyers available, especially of Toronto Condos that are high in demand, original buyers may sell their newly purchased condo for a profit. Due to increase in the market price of the condo between the time the original buyer bought the condo/ contract from the builder and the closing date, the original buyer sells the condo for a higher price and makes a profit. Unavailability of condos in a certain area can also impact prices.
It’s not always that an original buyer sells to make a profit. Changes in circumstances such as change of job, marriage, the birth of children, illness, etc. can lead the original buyer to sell his or her condo. Whatever the original buyer’s reason for selling, it’s a win-win situation for both the original buyer and the third-party buyer.
When Can the Agreement Take Place?
The Assignment of Agreement of Purchase and Sale can only take place after the original buyer has agreed to purchase the home from the builder, but before he or she has closed the deal and taken the ownership of the property. The title of the condo is given to the third-party buyer and not the original buyer after an assignment sale has taken place.
Such an agreement usually takes place where the builder has sold out most of the homes, but there is still demand from buyers. In such a case, a buyer looks to purchase a home from an existing buyer in condos that are still under construction or in preconstruction.
Long closing date, possibly a year or two later, for condos in preconstruction or under construction helps both the original buyer and the third-party buyer to negotiate a deal. The original buyer can make more profit if the closing date is further away, as the price of the property will naturally increase over time. Moreover, since there is still demand for his or her newly purchased condo, the original buyer increases the price depending on how many buyers are interested and how much they are offering to pay.
Advantages for the Original Buyer/Assignor and the Third Party Buyer/Assignee
This is a mutually beneficial agreement between the assignor and the assignee for the following reasons.
Benefits to the Seller or Assignor
- The Assignor makes a profit from the deal.
- Usually, the Assignor does not pay land transfer tax or closing costs.
- The Assignor doesn’t pay taxes such as GST/HST to the builder upon closing. If the Assignee closes the deal, taxes are paid by the Assignee. If the Assignor rents out the home, he needs to pay the GST/HST rebate back to the builder.
- Assignee fulfills all pending financial obligations when taking occupancy of the home.
Benefits to the Buyer or Assignee
- The Assignee gets a new home in their desired location and can choose to customize the home if the assignment takes place in time.
- An assignment can be a great option when there’s a shortage of condos in the desired location.
- Since in most cases the home is already under construction, the Assignee can visit the property and make their decision about buying it or not.
- If the Assignor is in a hurry to sell, the Assignee can bargain for a lesser price for the home.
- Since most people don’t go for assignment, there’s less competition.
- Usually, occupancy is just a few months away or has already begun, so you can move into your new condo without a long wait.
Why Assignment Sales Work
Assignment sales give a buyer the option of pulling out of the purchase contract with a builder. This freedom to sell a condo before getting its ownership helps homebuyers to invest without worry. Even if for some reason they are unable to close the deal, they can anytime sell their rights in the contract for a profit.
The Assignor avoids closing costs, including HST, land transfer tax, utility connection costs, etc. Also, no mortgage is taken out because of the mortgage kicks in only after the final closing. The Assignee is happy with the sale because he or she gets the desired condo where no condos were available for sale. If the Assignor is in a hurry to sell, the Assignee can negotiate and buy the condo for a good price. All in all, it is an advantageous deal for both the buyer and the seller.
Prohibition Clauses to Look For
Standard Toronto Real Estate Board (TREB) or Ontario Real Estate Association (OREA) does not prohibit a buyer to sell a home before taking its possession. However, many builders place a clause in their agreement with the buyers that restrict the buyer to assign the home to somebody else before getting its ownership. Some builders allow buyers to sell their home in exchange for a significant fee. The builder’s agreement of purchase and sale has specific information on if and how they allow buyers to sell to third-party buyers.
If you are purchasing a home only to make a profit by selling it before closing the deal with the builder, do review their agreement of purchase and sale to understand your options. A lawyer can be helpful in understanding and be executing the agreement.
If the agreement explicitly states that the Assignor may not assign the contract to another person or list their homes for sale or rent on listing services, doing so will be considered a breach of the agreement. The builder may terminate the contract upon breach, keep the deposit money and may charge the buyer with damages. Therefore, before entering into an Assignment of Agreement of Purchase and Sale, consider your builder’s stance on it. Even if the builder allows it, ensure that it is clear to you during what time you can list out your property and complete the assignment with the third-party buyer. Remember that each builder will have different clauses in their agreement.
What Consent from the Builder Looks Like
A builder even if they have included the ‘No Assignment’ clause in their agreement may choose to allow assignment. This can be because the buyer is a friend or family member of the builder, or the builder sees profit in doing so. If a builder agrees to an assignment, they will have to give written consent to the buyer. In such cases, a builder may still include a clause where they can arbitrarily withdraw the permission without providing any reason for doing so.
A builder may also restrict listing the property on Multiple Listing Service (MLS). Depending on the builder, they may put different restrictive clauses or none at all. The clauses the builder places will dictate how you proceed. If the build is not allowing you to advertise the selling through MLS, you may need to look for other options to get the word across to the buyers. If you pre-decide your method of advertisement (advertisements on social media, websites, etc.), it will give you a chance to ask the builder for specific consent and avoid problems and misunderstandings later.
If the original buyer obtains prior written consent and the builder changes his mind and decides not to allow such a transaction, there is little the original buyer can do but to wait till the deal is closed and the home is purchased from the builder.
If you have a good relationship with the builder, there is little to worry if written consent has been given. In other cases, it is wise to carefully review and consider all the clauses put up by the builder and be prepared for a cancellation of the consent until the agreement with the third-party buyer/Assignee is completed.
When you buy a new condo, there is a period when you occupy the home and when you take its ownership. After a condo is completed, the builder has to register the building so that it is in the land registry records. Until then, the condo does not exist, as far as the government records are concerned, and the Assignee cannot have the ownership of the home. This period between the completion of a condo and its registry is when the Assignee has to wait for the ownership. This period of occupying the home while not having its ownership is called ‘interim occupancy.’
Occupancy fee is paid to the builder for living in your new home without ownership. This is stated in the agreement with the builder. The amount of occupancy fee to be paid to the builder is approximately the amount of interest to be paid on the remaining purchase price. For example, if the condo is for $500,000 and you have made a down payment of $ 200,000, you will need to pay occupancy fee that is equal to the interest payable on the remaining amount of $300,000. That means, the more you pay in down payment, the lesser occupancy fee you will need to pay to the builder.
It must be remembered here that the builder tries to give ownership to the buyers quickly because it is only when the buyer receives the ownership that the mortgage becomes active.
Occupancy fee is a common practice, and if you are buying a new condo, you need to add this expense to your payments list. Usually, the occupancy period lasts from 3 to 6 months. Since there are a lot of builders registering their constructions, registration can take time. There is no specific date the builder can give about when they are able to transfer the ownership of the condo to the buyer. More experienced builders will usually have shorter occupancy periods, as they know the process well and have experienced staff dealing with the registration and transfer of ownership.
Land Transfer Tax
When you buy land or an interest in land, buildings, buildings to be constructed, and fixtures in Ontario, you need to pay Ontario’s provincial land transfer tax when the transaction closes. If you have bought the condo or an interest in it in Toronto, you need to pay the Municipal Land Transfer Tax in addition to PLTT. Since the buyer and not the seller pays the land transfer tax, it becomes the liability of the Assignee to pay this tax.
Ontario – Provincial Land Transfer Tax
- 0.5% of the total value of the property up to $55,000
- 1% of the total value of the property from $55,000 to $250,000
- 1.5% of the total value from $250,000 to $400,000
- 2% of the total value of $400,000 up
Toronto – Municipal Land Transfer Tax
- 0.5% of the total property value up to and including $55,000
- 1% of the total value from $55,000 to $400,000
- 2% of the total value of $400,000 up
If it sounds confusing, you can simply use a Land Transfer Tax calculator.
Land Transfer Tax Rebate
The good news is that there is a rebate on both MLTT and PLTT available to first-time homebuyers.
– For Toronto Municipal Land Transfer Tax, the maximum rebate is $3725.
– For Ontario Provincial Land Transfer Tax, it is $2000.
HST Tax – How it is to be Calculated?
A person is eligible for the GST/HST new housing rebate if he or she purchased the new housing for use as the primary place of residence. If your new condo is not your primary place of residence, you don’t qualify for the GST/HST rebate. On this government of Canada page, there is more information on the eligibility requirements for GST/HST rebate for new homebuyers.
In Ontario, the Harmonized Sales Tax (HST) was implemented on July 1, 2010, increasing the cost of purchasing a home. A 13% HST is charged on the purchase (5% federal tax + 8% provincial tax). However, most homebuyers are eligible for the HST rebate.
If the Assignee is not eligible for the rebate, he or she will need to pay the GST/HST tax at the time of the closing. If the Assignor qualified for the HST rebate prior to the assignment, then after the assignment the Assignor will lose the rebate because he or she has assigned the title to the new home to the Assignee.
Now, the Assignee will have to see if he or she qualifies for the HST rebate. If the Assignee qualifies for the rebate and the total purchase price includes HST, it can be included in the assignment agreement that the Assignee qualifies for the HST rebate and the builder will credit the amount to the Assignee upon closing. It depends on the builder’s discretion if they agree to this or not. Since the HST goes to the government and not the builder, the builder might not be interested in it. Many builders have ways of avoiding paying HST, so it is wise for an Assignee to ask the Assignor about the HST before buying. If the builder doesn’t agree, it comes down to the Assignor and Assignee to estimate the HST and settle the matter between them. If that happens, it is vital to put it down in writing who will pay the HST and when to avoid dispute.
Also, if the Assignor’s sale of his or her interest to an Assignee is taxable, the total amount payable for the sale of the interest is subject to GST/HST, including any amount the Assignor paid as a deposit to the builder, whether or not such an amount is separately identified. For example, the Assignor buys a condo from a builder and pays a deposit of $10,000. The Assignor then enters into an Assignment and sells the rights to the Assignee. The Assignee pays the deposit of $15,000. If the sale of the contract is subject to HST, the tax will apply to the entire $15,000. It will be so even if there is specifically mentioned in the Assignment that the $10,000 is a recovery of the deposit that the Assignor had paid to the builder.
Tarion Warranty Cost & Enrollment
Tarion, formerly known as the Ontario New Home Warranty Program is a private corporation established by the statute in 1976 to protect homebuyers by ensuring that builders follow the established regulations. For freehold homes and condominium units, the builder pays the warranty enrolment fee to Tarion. For condominiums, the enrollment is done at least 30 days before construction starts. Tarion gives an enrollment number to the builder for the condominium.
Builders in Ontario are required to honour the Ontario New Home Warranties Plan Act and offer statutory warranty coverage to homebuyers. The coverage includes:
1. Protection of deposits made to the builder
2. Compensation for delays in closing or occupancy
3. Seven-year warranty on major structural defects
4. One or two-year warranties for certain defects in work and materials
5. Coverage for a common or shared area of the condominium building
6. Protection against Financial Loss for Contract Homes
7. Protection against unauthorized substitutions
The cost of the warranty for a home depends upon its sale price. The higher the price of the home, the higher the warranty cost.
- The maximum statutory warranty coverage for new homes and condominiums is $300,000.
- The maximum coverage for condominium common elements is $50,000 times the number of units, up to a maximum of $2.5 million.
- There is a maximum of $15,000 for warranted damage caused by environmentally harmful substances or hazards, and a maximum of $25,000 for coverage of septic systems.
The fee paid to Tarion by the builder is to be paid by the buyer at the time of the final closing along with other ‘adjustments.’
Below is the Tarion warranty fee table, which will help you to determine the cost of the warranty. The builder adds the warranty cost to the total purchase price.
Condominium conversions – existing buildings such as an office building or a residential apartment that are converted into condominiums by a builder – are not covered by Tarion warranty. Other types of homes that are not covered by the statutory warranties include:
- renovated homes
- previously occupied homes
- houses built by the owner himself/herself or where the owner exercises significant control over the construction of the home such as selecting, approving, revising and directly supervising the work
- homes built on an existing foundation
- seasonal homes where the owner does not reside all year round
Most issues that require resolution are handled by the builder without involving Tarion. Only when the builder fails to honour their warranties that Tarion steps in to resolve the issues.
Before buying a new condo from a builder or an Assignor, it is essential to check if the condo is entirely new construction. If the condo is considered a resale or a conversion, the homeowner cannot be covered by Tarion warranty.
After the assignment, it becomes the responsibility of the Assignee to pay the closing costs. Some of these costs are:
- Estimated property taxes for up to 2 years
- Builder’s legal fee
- Land transfer tax
- Hydro/water/gas meter installation and connection charges ($500-$700 per meter)
- Development charges/levies
- Tarion warranty
- GST/HST rebate
- Municipal levies
Any other fee that has been included by the builder in the original Agreement of Purchase and Sale is required to be paid by the Assignee upon closing. Usually, these costs are not covered by the mortgage.
Determining the Total Purchase Price
After entering into the agreement with the builder, the Assignor has paid the deposit, paid for any upgrades, customization, and might have made other payments to the builder. These are added to the total purchase price. If under a payment schedule, one or more down payments have been made to the builder, these are also added to reach the total amount without profit.
Now, the Assignor needs to look at the payments that he or she will need to make before closing. If the Assignor wants the Assignee to pay all or most other due payments after the assignment, they may tell the Assignee so. The Assignor can estimate the payments to be made in future and include them in the total purchase price. In such a case, the Assignor will need to add it in the assignment agreement that all due payments till closing will be made by him or her and not the Assignee. To limit their burden, most Assignors will ask the Assignee to make all future payments after the assignment.
Lastly comes the profit. After adding all the payments made to the builder and the original purchase price of the condo, how much profit does the Assignor desire? This can be based on the demand, the location of the condo and the development of the location in the future. Before determining the profit, research to find out a fair price to charge or contact an experienced assignment realtor. This is a crucial step, as it determines the Assignor’s returns for going for assignment in the first place (if profit was the primary aim of assignment).
Once you have calculated the total purchase price, you can (if the builder allows it) advertise the home on MLS and wait for buyers to contact you.
Making the Assignment Deal with the Assignee
Once you have found a good buyer of your home, you may negotiate the deal, including the following aspects:
1. What are the additional costs the Assignee will need to pay? (property taxes, water/gas connection charges, development charges, discharge of builder’s mortgages, Tarion New Home Warranty, etc.)
2. Is the Assignee depending upon financing to pay for the home? Find out how easy or difficult is it for the Assignee to obtain financing.
3. What are the adjustments the builder will charge at the time of closing?
4. Who pays the assignment fee? (Usually, the original buyer/Assignor pays the assignment fee to the builder)
5. When and how much money in total will the Assignor get? (Consider the deposit the original buyer has made to the builder. Upon the completion of the assignment, the new buyer takes on the deposit. So, the original buyer will add the deposit amount to the profit when negotiating the deal with the new buyer)
6. When is the closing date? (The closing/registration date is when the ownership of the property is transferred to the buyer. The buyer legally becomes the owner of the home. From this date, the mortgage payments begin to be charged)
7. When is the occupancy date? (Occupancy date is the date on which the buyer is allowed to move into the new home. The Assignee can only move into the home after the occupancy closing date has been set by the builder)
8. Who will receive incentives and interest from the deposit before the deal is closed? (Depending upon the amount of interest and the types of incentives, the Assignor and the Assignee can decide who receives which benefits)
The timing of the Payments
When exactly do the builder and the Assignor receive payments from the Assignee? This needs to be determined before the assignment is signed.
Deposit – In most assignment agreements, the deposit made by the Assignor to the builder is paid back to the Assignor when the builder consents to the assignment. The Assignee needs to make the deposit to the builder at this time.
Profit – The profit the Assignee will pay to the Assignor is usually paid when the agreement between the builder and the Assignee is closed. This happens after the final closing because the Assignee can only receive mortgage funds after his or her deal closes with the builder and not before that. Therefore, the Assignor has to wait till the Assignee’s deal closes with the builder to receive profit.
Adjustments – Any adjustments that the Assignee will need to pay to the builder such as development charges, gas and meter connection, etc. are paid at the time of the final closing.
It is wise to remember that in case the Assignee fails to make all required payments, it becomes the Assignor’s responsibility to close the deal with the builder.
Risks for the Original Buyer/Assignor
Even after having entered an Assignment of Agreement of Purchase and Sale with a new buyer, the original buyer is still liable to complete the deal with the builder if the new buyer fails to do so. Essentially, till the agreement with the builder has been completed, the dues paid for and all obligations fulfilled, the responsibility of completing the agreement rests with the original buyer. The builder explicitly writes this in the Agreement of Purchase and Sale. If the agreement between the Assignor and Assignee or the builder and the Assignee fails, the Assignor is liable to fulfill the obligations and complete the deal with the builder.
Builders ensure that even if things go wrong with the Assignor or the Assignee, they remain safe. That is why in most of their agreements you will find clauses that will hold the Assignor or the Assignee responsible for fulfilling the contract. The agreement may contain clear terms that assign the responsibility for the terms and conditions of the agreement to the Assignor. In certain cases, the Assignee may also need to sign a contract where the Assignee is bound to meet the obligations made by the builder.
Whether you are the Assignor or the Assignee, it is vital to learn about your obligations under the agreement from the date you enter the agreement till the date the agreement is fulfilled. The Assignor may know the responsibilities of all the parties concerned – the builder, the Assignee and himself or herself. The same holds true for the Assignee. Having clarity right from the start can make the assignment process smoother and less burdensome for all.
Clauses to Include in the Assignment Document
All parties must protect their interest with the common goal of easing the process, and therefore, should include clauses that will ensure a risk-free transaction. The document should have the clause that the assignment is being done by the consent of the builder (after obtaining the builder’s consent). Even though the builder might include that he or she may arbitrarily withdraw the consent without giving any reason, it is important to state that the builder’s consent has been obtained.
Another crucial factor that commonly leads to disagreements or collapse of such agreements is payments. It must be in writing who is responsible for paying what. If the Assignee is liable for most payments (deposits, scheduled payments previously made, taxes, lawyer fee, electricity and gas connection payments, and other charges) after the assignment, all the items should be specifically stated in writing and their responsibility for payment made towards the Assignee. Other payments typically to be made by the Assignor such as the payment of the assignment fee to the builder also need to be mentioned in the contract. The assignment fee is typically 1% of the original purchase price. Also, the builder may charge a legal fee, which can be anywhere close to $400. Documenting all the payments ensure that all parties are well aware of their liabilities so that in case of dispute the documentation can be held as proof to hold a party responsible for a liability.
It should be added to the assignment that all parties, including the Assignor, will be informed about the progress of the deal between the builder and the Assignee. All parties have the right to information on the developments and payments on the property till the final closing.
Recording the Agreement in Writing
You have negotiated the agreement with the Assignee/Assignor, and the builder has permitted assignment. Now you need to record the contract in writing so that it becomes legally binding. The Ontario Real Estate Association (OREA)’s Form 150[i] is a standardized form of Assignment of Agreement of Purchase and Sale for condominiums. However, builders often use their own customized assignment forms that contain more information than in the standardized form.
The Assignment of Agreement of Purchase and sale form includes:
- the full legal names of the Assignor and Assignee, their contact details and address
- the Assignor’s interest in the property (condo’s plan no, unit no, level no, building no, exclusive parking space, locker, etc.)
- the purchase price
- irrevocability of the agreement until a specific time, date.
- payment of taxes such as HST
Form 150 Schedule A and Schedule B are attached with the Assignment of Agreement of Purchase and Sale form. These forms are specific to condominiums. They include:
- the total purchase price of the property
- the purchase price of the original agreement between the builder and the Assignor
- deposits paid by the Assignor to the builder under the original agreement
- payment by Assignee to Assignor for this assignment agreement
- amount of deposit paid under this agreement
- the balance of payment for this agreement
A builder may include more clauses in the agreement to avoid risk. The clauses added to the assignment may also depend on the Agreement of Purchase and Sale between the Assignor and the builder. If the builder believes that some of its clauses may put them at risk, they may include those in the assignment agreement. The agreement is legally binding, and the Assignee is liable to fulfill all the terms and agreements in it.
It is good to attach the Agreement of Purchase and Sale between the builder and the Assignor with the assignment agreement. That brings greater clarity to the procedure.
Even if you are, as the Assignor or Assignee, using the builder’s customized assignment form and think that some more clauses should be added to it, you can communicate it to the builder and have it included in the assignment. As long as it is not adversely impacting the builder, there is no reason not to have more clauses for the safety of all parties.
OREA Forms for Assignment
The forms by OREA that you might need to complete if you’re entering into an assignment are:
Form 142 – Schedule-Assignment of Agreement of Purchase and Sale
Form 143 – Amendment to Assignment of Agreement of Purchase and Sale
Form 145 – Assignment of Agreement of Purchase and Sale
Form 150 – Assignment of Agreement of Purchase and Sale: Condominium
Form 151 – Notice to Remove Condition(s) – Assignment of Agreement of Purchase and Sale
Form 152 – Mutual Release – Assignment of Agreement of Purchase and Sale
Form 153 – Waiver – Assignment of Agreement of Purchase and Sale
Form 154 – Notice of Fulfillment of Condition(s) – Assignment of Agreement of Purchase and Sale
Form 155 – Termination of Agreement by Assignee – Assignment of Agreement of Purchase and Sale
Form 156 – Termination of Agreement by Assignor – Assignment of Agreement of Purchase and Sale
How to Complete OREA Form 150 (Assignment of Agreement of Purchase and Sale: Condominium)
This is the standard form of Assignment of Agreement of Purchase and Sale for condominium by OREA. Even if the builder has created a customized agreement, it will have common elements with the OREA form. Many real estate agents and lawyers are not familiar with assignments, so it is better to know what this form is all about and how to complete it.
Use this example to know how to fill the form:
David Woods bought a condo for $500,000 from a builder. He has to pay the amount in two installments of $250,000 each. He has made one down payment of $250,000 when he finds that he has to move to another city. He sells his condo to Mary James for $570,000. David has paid $20,000 to the builder as the deposit. Since David is not yet the owner of the condo, he can only transfer/sell his contract or rights in the contract with the builder to Mary. For transferring/selling the contract, he (Assignor) will need to enter into an assignment with the new buyer (Assignee). He does this through OREA Form 150 or a customized assignment form of the builder.
He fills the form thus:
Assignee – Mary James
Assignor – David Woods
Purchase price – is the total amount including profit made by the Assignor. So, the purchase price is $570,000. HST is included in the purchase price.
Deposit – The deposit amount the Assignee has paid with respect to the Assignment agreement. It is not the deposit the Assignor (David) has paid to the builder of $20,000.
1. Total Purchase Price including the original Agreement of Purchase and Sale and this Assignment Agreement is $570,000.
2. Purchase Price of original Agreement of Purchase and Sale as indicated in Schedule C is $500,000. Schedule C is the original Agreement of Purchase and Sale between the Assignor and the builder. The Agreement of Purchase and Sale is to be attached to Form 150 as Schedule C.
3. Deposit(s) paid by Assignor to the seller under the original Agreement of Purchase and Sale as indicated in Schedule C, to be paid by the Assignee to the Assignor as follows: This is $250,000. It is the number of installments/deposits the Assignor has paid to the builder at the time of signing the assignment (one more installment of $250,000 is to be made to the builder)
4. Payment of Assignee to Assignor for this Assignment Agreement – is $70,000. This is the profit the Assignor is making in selling the condo to the Assignee.
5. Deposit paid under this Assignment Agreement (in accordance with Page 1 of this Assignment Agreement): is the deposit the Assignee has paid to the Assignor for the Assignment Agreement. It is not the deposit paid by the Assignor to the builder.
6. The balance of payment for this Assignment Agreement: It is the balance left to be paid by the Assignee.
When is the Best Time to Sell a Condo through Assignment?
You can sell your contact with the builder at any time during the construction of the condo. However, the best time to sell a condo through assignment is when the occupancy period has begun. That makes your condo ready-to-move and gives you lesser waiting time before closing. Between the occupancy and the closing, there is usually a gap of no more than 4 to 8 months. Since the Assignee will only pay you your profits after the closing, it is best to sell later than earlier especially if the cost of your condo in the market is rising with time.
Hiring a Realtor and a Lawyer
The Assignor and the Assignee must have their own lawyers review the assignment documents. It is never a good idea to have one lawyer work for both the parties. Each party has different interests and, therefore, each should hire a lawyer who has expertise in assignment agreements.
Since assignment sales are not very common, not many lawyers and real estate agents are familiar with its process and obligations. So, before choosing to hire a lawyer and a realtor, take a look at their past assignments.
Assignment sale is a good option for both buyers and sellers if traditional selling cannot take place for some reason. The only thing to keep in mind is to have everything in writing and take permission from the builder for the assignment. If all parties cooperate, the process is not difficult and leads to benefit to both the Assignor and the Assignee. Help from an experienced realtor goes a long way in easing the process from its start to its completion.