An assignment sale happens when a buyer purchases a pre-construction property and later sells the rights to that contract before the project is completed. In other words, the “assignor” sells their right to take ownership to another buyer, known as the “assignee.”
Assignment sales are common in pre-construction condos or townhomes where demand is high. They allow the original buyer to transfer the purchase before closing, often to capture market gains or free up funds for another investment.
While assignment sales can be profitable, they are complex. The new buyer usually pays the original purchase price plus an agreed-upon premium. They then assume the remaining payments, closing costs, and responsibilities when the unit is completed.
Buyers considering assignment purchases should always work with an experienced realtor and lawyer. There are strict conditions, including builder consent, HST implications, and specific deposit structures. Financing can also be more challenging because lenders view assignment deals differently than standard resale transactions.
Assignments can offer unique opportunities. For example, buyers may be able to secure a new home at below-market value if the original purchaser needs to sell quickly. Conversely, sellers can benefit from early appreciation without waiting for the full construction timeline.
Interested in exploring pre-construction or assignment opportunities?
Let’s discuss your goals and evaluate which strategy fits your timeline and budget.