Assignment Sales in Toronto are a very hot topic these days. There are many amazing opportunities available for buyers AND sellers, but not all of them are worth considering.
What makes a good assignment sale to pick up as a buyer? When is a good time to sell your condo on assignment? Here, we’ll break down our top 10 tips for both buyers and sellers.
Assignment Sales in Toronto – Work with an Experienced Broker
The first thing any buyer or seller needs to know is that this type of real estate transaction isn’t an easy one. In fact, it’s one of the most complicated out there, and there are a lot of legal components to this transaction that need to be implemented properly. An overlooked document or a clause that is forgotten could land any buyer or seller in some pretty serious hot water.
Work with a broker who has represented both buyers and sellers in Assignment Sale transactions. Having someone on your side that knows the ins and outs of buying and selling will ensure a smooth transaction and that no items are missed on either side.
Patience is Your Biggest Asset
You’re going to hear this from us over and over again, but it’s worth repeating. Assignment sales in Toronto are unlike any other real estate transaction out there.
You’re not going to see a bidding war and more times than not it’s going to take a bit longer than usual to complete. The reason for this is that most buyers don’t understand what an Assignment Sale is, so the buyer pool is limited. It’s complicated, but very doable.
So be patient and don’t expect to buy or sell within a few days. Give yourself 60 days on the market if you’re selling – set this expectation from the get-go and you won’t be nervous or disappointed. You’ll be happy when the right buyer comes along, or the right assignment sale in Toronto presents itself to you.
Selling Marketing Strategies Will Be Different
Did you know the majority of Assignment Sales can’t be listed on MLS? This is a rule that is put in place by the developer and must be followed.
So, when listing an Assignment Sale, you need to have the right marketing in place that reaches the right buyer. A digital marketing campaign with the right target buyer profile is key – both on Instagram and Facebook.
A good agent that is experience in Assignment Sales will have a database of not only brokers, but buyers who are looking for opportunities. Personal contacts with investors both locally and internationally will help get your listing exposure, as are some unconventional methods such as advertising online newspapers and digital magazines that attracts investors.
A Good Lawyer is Critical to the Success of Your Purchase or Sale
Just as we said about experienced real estate brokers, it’s equally important to have an experienced lawyer who has completed several of these transactions.
Not only are the buyer and seller involved, but the developer as well. There are certain clauses that need to be examined and read through carefully to ensure all of the I’s are dotted and the T’s are crossed.
It’s also helpful to have people in your corner that speak the language. Pre-construction deals are different than resale, so everyone should be playing for the same team on this type of transaction.
Agreement of Purchase & Sale Cannot Change
The Agreement of Purchase and Sale that is done with the developer and the original purchaser and cannot be changed. So, as the buyer, you will be inheriting that agreement as your own, so ensuring all of the right clauses and caps are included in that document is incredibly important.
Permissions Need to Be Outlined in Your Contract
Many think this is an automatic, but only a good pre-construction broker will ensure you have the Right to Sell on Assignment laid out in your pre-con purchase. If this isn’t spelled out in black and white in your Agreement of Purchase and Sale you may not even be able to sell.
Check with your paperwork first to be sure the clause is in it that allows you to sell. See the clause there? Great, now check to see if there are any fees associated with selling on assignment.
Some developers will include a fee. A good pre-con broker who represents you in the purchase will ensure there isn’t a fee, or at the very least, that fee can be reduced.
Need a broker to represent you in your pre-construction purchase? We know a good one.
Assignment Sales in Toronto – The Developer Still Has the Final Say
Final vendor consent is still one of the last steps in your Assignment Sale transaction. That’s why working with a broker that has great relationships with developers can really help your assignment sale purchase or sale.
We’ve seen times when everything has been lined up perfectly, but the developer has put in delays based on the timing of the project and where things currently stand. Open and clear communication, and an understanding of the process really goes a long way in situations like these. It’s not a red light, but just a proceed with caution note.
The Biggest Advantage of Purchasing an Assignment Sale
The main reason buying a pre-construction condo is so appealing to both end users and investors is because of the ability to build equity as the condo is being built. When a buyer is forced to or opts to sell on Assignment, they are typically OK leaving some of the equity that the condo has earned on the table to get them out of having to close on the unit – this value is then there for you to inherit.
The Biggest Advantage of Selling on Assignment
If pre-construction investing is in your wealth strategy plan, using assignment sales to win is a no-brainer. The market has been successful for many first-time investors, and signs point to a continued strong pre-con market.
By selling on assignment, you’re able to invest with your deposit, and sell prior to closing without being greedy, yet still making a better return on your deposit money than most other investments. Selling your pre-construction contract gives you the advantage of reinvesting your money again and again with a steady, predictable return.
Assignment Sales in Toronto – Sale Offer Conditions
When purchasing a resale condo or house, there are sometimes conditions that are associated with your offer for your protection – things like financing and home inspection or status certificate. Sometimes there are no conditions to make your offer more appealing in the case of competition.
When buying a condo on Assignment, we ensure several conditions are put into each offer, as this is a very different type of transaction. Some of the conditions we include are:
- Developer consent of the assignment sale
- Verification of deposit paid to developer to date
- Verification that the seller has the right to sell on assignment
- Verification that the seller is not in default
As you can see, Assignment Sales in Toronto can provide major benefits for both buyers and sellers. You’ll get a brand-new condo without the years-long wait that typical pre-construction buyers have to endure. Don’t shy away from buying an Assignment Sale – just be sure to work with brokers like us who have an exceptional, long track record of successful transactions.
If you’d like to learn more about how Assignment Sales can work for you, and what projects are on our hot list, simply fill out the form below and we’ll be in touch via email right away.
Comment by James Tarley | on
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