The Assignment Process - Step-by-Step about how it will get your condo sold.

The Process

If you have purchased a property in a development which is still under construction and wish to sell prior to closing, you must do so by way of an assignment sale. You do not have title (ownership) and the condo is not yet registered so you are selling (or assigning) your Purchase Agreement.

Get the Builder's Consent
The first step is to confirm and clarify the terms of your contract as to the conditions and costs associated with an assignment. Usually the developer charges an administrative fee which you are responsibility to pay. Most contracts restrict assignments, especially prior to Interim Occupancy.

We will prepare a letter for you to make a formal request to the developer's lawyer to get the builder's permission for you to assign your agreement. A typical fee is 1% of the original purchase price plus the builder's legal fees ($400 or more). Cost details.

Stop Paying for Interim Occupancy
We have created a process that allows you to be relieved of your interim occupany fees until final closing. The new buyer would assume the occupancy costs from date of acceptance of the assignment until closing. They would provide a reasonable deposit to secure the transaction. They would close and pay closing costs including land transfer taxes, and any levies (education, utility connections, etc.) that the builder might be allocating to the unit owners. You would get your deposit monies and profit at closing. The buyer would get his mortgage to cover the costs to pay you (your deposit + profit) and the balance owed to the builder. See "Buying an Assignment" below.

List and Sell
Assuming that your Purchase and Sale Agreement (with the builder) allows you to assign the contract prior to completion (closing) you should hire a Real Estate professional who has experience and expertise in handling condo assignments.

Few Realtor's have experience doing assignments. For an experienced Realtor® contact me, Dennis Paradis, Sales Representative, RE/MAX Hallmark Realty Ltd., Brokerage, for a successful completion of your condo assignment backed by a reliable and experienced team of professionals.

See my New Condo Marketing Plan.

Staging
We highly recommend you stage your unit for sale, especially if it is vacant. We have partnered with an experienced stager who can add the rental furniture and extras to sell your unit in days rather than months and you will usually get a higher price. Staging costs are lower than you might think and you can get free estimates. You will usually cover the cost of staging by the faster sale (less occupancy costs) besides getting better offers. This option only applies if you are into your interim occupancy period. Otherwise, there is no access and no showings. This requires extra effort on your realtor's part to create effective marketing materials.

See Staging Information

Buying an Assignment

Example:

Original Purchaser buys a condo from a Builder/Developer in 2008 for $250,000 with a total down payment of 20% paid to date ($50,000), completion (closing) is scheduled for 2010 (the exact date of closing may still not be announced by the builder at this time). Let's say that Interim Occupany is scheduled for May, 2011 and it is now February, 2011.

The original purchaser (assignor) could "assign" the property to another party (assignee) for a sale price of $275,000. A price an experienced assignment realtor has helped determine.

To purchase the assignment the new buyer (assignee) would pay to the assignor the following amounts in order to assume the assignment contract:

Original Deposit = (20% paid to date by Original Purchaser)	$50,000
Plus:
Difference in Assignment Price from Original Price = (New Price $275,000 less original Price $250,000)	$25,000

Total Deposit/Cost today to Purchase Assignment = (payable to Original Purchaser to take over contract) Note: Since the unit is still owned by the builder, not the assignor or assignee, it cannot be mortgaged by either party so the assignee (new buyer) cannot readily come up with funds to cover the above costs (your deposit and profit) at this point in time. We recommend the assignor get a new deposit $20,000 or 5% as security, held in trust - not to be confused with the builder's deposit paid by the assignor), get the assignee to assume the occupancy fees, then wait until closing to settle the balances owed.	$75,000

When the property is ready for closing, perhaps 3-4 months after interim occupancy begins, the new buyer (assignee) completes the sale with the Vendor (Builder/Developer) under the same terms and conditions per the original purchase and sale agreement.

The Process

Buying an Assignment