What Is An assignment Sale
An assignment sale is a real estate transaction in which the original purchaser of a pre-construction property (such as a condo or a house) sells their purchase contract to a new buyer before the property is completed and occupied. In an assignment sale, the original purchaser is effectively assigning their interest in the property to the new buyer, who then takes over the contract and becomes the new owner of the property upon completion.
The original purchaser may choose to sell their purchase contract for various reasons, such as a change in personal circumstances, financial difficulties, or the potential for a profit. The new buyer may be attracted to the purchase because of the potential for a lower price than what they would pay for a similar completed property, the opportunity to customize certain finishes, or the potential for property appreciation.
In an assignment sale, the original purchaser and the new buyer typically agree on a purchase price, and the original purchaser may be required to pay the developer any difference between the original purchase price and the sale price. The terms of the assignment sale, including the price, deposit requirements, and closing date, are outlined in an assignment agreement that is signed by both parties.
When buying an assignment sale, there are several factors to consider.
Some of the most important ones are:
- The developer: It is important to research the developer of the property and their track record. Look at their previous projects, reviews, and reputation in the industry.
- Location: Consider the location of the property, its proximity to amenities such as schools, parks, shopping centers, and public transportation.
- Terms of the assignment: Review the terms of the assignment sale, including the price, deposit requirements, closing date, and any other conditions of the agreement.
- Condition of the property: Assess the condition of the property and the quality of the construction. If possible, inspect the property or review the inspection report.
- Future market trends: Consider the current and future market trends in the area. Look at the potential for property appreciation and rental income.
- Legal advice: Seek legal advice before entering into an assignment sale agreement. A lawyer can review the agreement and ensure that your interests are protected.
- Financing: Consider the financing options available to you, including the terms and conditions of the mortgage. Make sure you can afford the purchase and any associated costs, such as closing fees and property taxes.
It is important to do your due diligence and carefully consider these factors before purchasing an assignment sale.