A Comprehensive Guide on
Real Estate Assignment and its Benefits.

What is a property assignment sale?

A condo assignment sale occurs when a buyer who had previously purchased a unit during the pre-construction phase wishes to sell the unit before the building's construction is completed, and before the building has been officially registered and an occupancy date has been reached.

Reasons for selling may include changes in the buyer's financial situation, a shift in plans for the use of the unit, or an investor looking to sell off a unit from a larger portfolio, among other reasons.

It's worth noting that developers may handle assignment sales differently, and some may not allow them at all. Therefore, it's important for pre-construction buyers to understand the terms and conditions regarding assignment sales, in case they need or want to sell their unit before the completion date.

Who is Assignor?

Assignor: The original purchaser of the pre-construction property who is selling the right to purchase the property to a new buyer.

Who is Assignee?

Assignee: The new buyer who purchases the right to purchase the pre-construction property from the assignor.

What are Benefits of selling a real estate assignment?

• The assignor can potentially make a profit, depending on market conditions and other factors.

• There are typically no closing costs involved in an assignment sale, since the sale occurs before the completion of the building and no mortgage is involved.

• Once the assignment is sold, the assignor receives payment and can use the funds as desired.

• Working with an experienced agent can help ensure success in selling the assignment.

• At therealestateempire.ca, sellers can benefit from exposure to thousands of active buyers, email marketing, social media promotion, and other services to maximize their chances of a successful sale.

What are Benefits of buying real estate assignments?

• Access to sold-out developments: Buying a condo assignment can provide access to a development that is already sold out, such as Station Park. This gives buyers an opportunity to purchase a unit they missed out on during the initial sale.

• Less competition: Assignments typically cannot be listed on traditional marketing channels, meaning there is often less competition for this type of real estate purchase. This can provide a fantastic buying opportunity, as units can often be purchased for their list price or in that general range.

• Exclusive listings: The Real Estate Empire has a number of off-market, exclusive listings that cannot be found on MLS, Realtor.ca, or coming soon listings. Working with their team of REALTORS® provides an unfair advantage for tapping into these exclusive listings as they first become available.

• Value buying opportunities: Assignors who need capital relatively quickly and are extra motivated to sell fast may provide outstanding value buying opportunities. Buyers may have room to negotiate on the list price, and a unit can potentially be purchased below the current estimated market value.

• Potential for early occupancy: If the occupancy date is just a few months away, buying an assignment can be especially attractive as the asset can be used to live in or lease out in the not too distant future. The Real Estate Empire has extensive experience in selling assignments, making them a valuable resource for buyers looking to take advantage of this opportunity.

HST on Assignment sale 

• The assignor is responsible for paying HST on the profit they make from selling a condo assignment, in addition to the deposit money that gets returned.

• Approximately 78% of the assignor's profit and deposit amount is taxable, but each assignment deal is unique and requires experienced professionals such as lawyers and accountants.

• List prices for condo assignments are being adjusted to factor in the estimated HST expense that the assignor will need to pay.

• It is important for assignors and assignees to work with experienced accountants and lawyers who are well-versed in assignment transactions to accurately calculate HST and explore potential options for paying it.

• End-users who are buying assignments may be able to avoid paying HST, but this varies on a case-by-case basis and requires expert advice.

Important points to be considered for Assignment Deals?

• Hiring a lawyer with experience in assignment transactions is crucial for both sellers and buyers, as laws and terms may vary and change over time.

• The completion of an assignment deal requires written approval from the developer, and cancellations by the seller are rare but possible. The assignor only receives the additional profit after the building is registered and the deal officially closes.

• MLS/Realtor.ca cannot be used for assignment listings, so having a real estate professional like The Real Estate Empire with a large buyer database and multiple marketing channels is beneficial.

• Selling or buying an assignment requires a complete team consisting of a real estate professional, lawyer, and accountant, as it involves owning an agreement until the condo is registered and occupied.
  
  

If you're interested in buying a home and taking advantage of assignment deals consider reaching out to The Real Estate Empire. Our team of experienced real estate professionals can help you find the perfect home in these vibrant and exciting region. Contact us today to schedule a consultation and learn more about how we can help you make your move a success.