What’s an assignment?

  • An assignment is when Seller sells their interest in a property before they take possession. Simply, they are selling their contract to someone to takeover. Buyer is buying the existing rights and obligations of their Agreement of Purchase and Sale contract.
  • Assignor = Original Purchaser
  • Assignee = New Buyer

Why Selling as Assignment?

  • Due to plan changes. Often from the time you purchase a pre-construction and by the time it closes, it might take more than 4 years. Things can change and new plans come up. New Jobs, growing a family, moving to another city, all circumstances are possible for someone to sell as an Assignment.
  • Financially not capable. Sometimes the original purchaser does not meet the qualifications to get financed and better to assign it to someone else.
  • No intention to close from the beginning. Many investors who purchases many pre-construction at once with no intention to close the property. It is all about lock in with profit now VS wait to close the property.
  • With Assignment Sale there will be two closings. First closing is between the Assignor and the Assignee. Second closing is between Assignee and the Builder.
  • Usually the Assignor would like the Assignee to pay the Original Deposit amount that has been paid to the builder + the difference between selling price and the original purchase price on First Closing Date
  • In other words, depending on how much the selling price is and the original purchase price; you might need larger cash flow to purchase the Assignment.
  • Interim Closing. Depending on when you are purchasing the assignment. The Assignor might have already done the Interim Closing with the Builder. Interim Closing means you can take possession of the property but do not own it yet. In the meantime, you will receive the keys from the builder and pay occupancy fees during the period until final closing.
  • Builder’s Approval. Now it's time to open your big folder you got from the builder and open the page to Assignment section. It states your rights to assign the contract. Most of the builders allow assignments with certain fees involved.
  • BE VERY CAREFUL with marketing. Most builders’ allow you to assign the contract but does not allow you to post it on MLS or other platforms. It makes VERY difficult to Sell Assignments unless you pick the right Realtor that knows the Ins and Outs with an assignment Sale.