Step 1: Condo Assignment Consultation
Please contact me, Dennis Paradis, at 416-399-5832 (cell/text) for an on-phone consult about your plans to assign your unit. Or, email me to call you - please specify your preferred call back times.
Requires 15 - 30 mins.
We will review the following steps and answer your questions or discuss any concerns about the requirements and process as summarized below:
1. Realty Fees are 6- 7% plus HST - based on new assignment selling price. Fees are split for example: List 4%/ 3% Buy. Discounts based on several factors - MLS available, urgency, multiple units.
2. Listing period is minimum 5-6 months - depends on market and starting season.
3. Your builder allows Assignments and has given you permission in principle to do so in writing (email is fine). They reserve the right to final approval of your new buyer (assignee) based on a credit check and proof of financial pre-approval.
4. Net Proceeds paid out (usually) at Final Closing - Net Proceeds is your profit (buy price-sell price) less selling expenses. In addition, you get back all the deposits you made to the Builder.
There is three possible Payout dates:
1. "Final Closing" : after the condo is registered and title is transferred to Assignee. (95% of the cases).
2. "Date Assignment is Approved by Builder: -this is the last step to complete the Assignment Agreement portion of the deal.
3. "Occupancy" or close to Occupancy.
Step 2: You Provide Condo Profile
If the preliminary consult (step 1) above looks good (for both of us) then you will be asked to complete an online form describing your condo in more detail. These details are used in Step 3.
Step 3: Your Valuation/Net Proceeds Report*
Your custom report will provide you with the valuation details and your Net Proceeds.
This report will be ready in 1-2 days and we will then consult again by phone.
Step 4: Assignment Agreement
There has been no cost or obligation for you up to this point but to proceed from here, we need to commit to working together via an Exclusive Assignment Agreement. This is similar to a Exclusive Listing Agreement used for authorizing an agent to list and sell a condo resale but with important differences,e.g; no firm closing date, you are not the owner yet, we cannot use MLS, and much more.
Step 5: Implement the Assignment Marketing Plan
Your Marketing Plan is activated
Step 6: Offers Negotiated, Conditions Managed and Deal Closed
We receive offers, negotiate a deal, manage the conditions, get final approval from builder whereby the new buyer "steps into your shoes" as the assigned buyer of the condo. All costs associated with the purchase going forward are now borne by the Assignee including future deposits, if any, and occupancy fees and of course final closing costs. Then, we all wait for the Final Closing where monies are dispersed.
*Valuation Methodology - Step 3 above
Three points of comparison are used to place a value on your condo:
1. What's your Builder up to?
Your greatest competition will be from within your building or another phase nearby (or planned) by the same Builder.
These properties (recently sold or currently for sale) will provide the closest compare to yours. You will need to be priced below the Builder as they have more leverage than we have. As an offset: You will have the internationally-recognized RE/MAX brand on your side! They provide the best source of leads from their unique websites - local, national and international in multiple languages. See Marketing Plan.
2. What other condo projects are selling nearby?
These other development projects will not be as near a match to your own building or project but will establsh another point of comparison and will need to be carefully adjusted for differences.
3. What are resales condos selling for in the same area especially very new projects listed on MLS?
These units have the most differences relating to a value/price comparison but are worth looking at. You cannot usually sell for more than these units if they have similar amenities and are only a few years old. They have much lower closing costs; can be viewed; can be inspected; view/exposure can be verified; have actual unit pictures not just model suite pictures or renderings; have registered condo status; have a board of directors; status certificates; property tax assessments;established condo fees and are on MLS. Plus, there is no concerns about HST rebates. Plus, the deposits involved are lower and there is no interim occupancy to get through. Closing date is negotiable but once agreed to is only changed by mutual consent. Those are the advantages a resale has over an Assignment.
Your Assignment offering has its appeal v.s. resale with: unique location, the latest amenities and features and it has (usually) never been occupied. Depending on the construction stage, the new buyer may get to pick colours, options and some upgrades. Buyers pay HST on the original purchase price (much lower). Plus, the price is often better than current market offerings.
1. What is a reasonable profit given the local market conditions and time since purchase?
2. What is a reasonable price per square foot for new and resales in the same neighbourhood?
3. Given reasonable rents for this area, does this value/price look attractive to investors?
Sources for Data:
1. Networking within my Industry
2. Industry Reports
3. TREB MLS
7. Contacts with Builders
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