What is an Assignment Sale Condo and Should I Buy One?

Due to changes in real estate trends, interest rates, and other economic factors, there has been an increase in condo assignment sales across Vaughan and the Greater Toronto Area over the past few years. However, given the relatively unique nature of these transactions, a lot of active buyers are unfamiliar with assignment sales and whether or not they make a good fit for them.  

In many cases, buying an assignment sale condo can come with certain advantages that you wouldn’t get when going the traditional pre-construction or resale route. So what should interested home buyers know about these unique types of real estate transactions? 

Not sure if life in a pre-construction condo will work for you? Click here to read our blog on the pros and cons of pre-construction. 

What Exactly is an Assignment Sale?

A unique type of property purchase, an assignment sale occurs when the original buyer of a pre-construction condo unit sells their purchase agreement to someone else before the construction is completed and the property officially closes. Ownership of the condo unit is then assigned to them, removing the original purchaser from the equation. 

However, unlike buying a pre-construction condo normally where you can research developments and available units online, finding assignment sales can be more complex. This is because assignment sales don’t usually enter the MLS system – which organizes and centralizes most for-sale properties in a given market. Instead, if you’re looking for assignment sale opportunities you’ll need to work with an established and well-connected real estate agent. 

Want to know more about the perks of living in a condo? Check out these other blog posts. 

• 3 Reasons to Own a Condo Before a House
• Can Downsizing Really Make My Life Easier?
• Top 5 Reasons You’ll Love Condo Living 

Opportunities for Saving

One of the most notable advantages of buying an assignment sale condo is that it can often be cheaper than if you were to buy the unit yourself earlier in the development process. In many cases, pre-construction owners who want to sell are looking to offload their unit as soon as they can. As a buyer, this gives you increased leverage for securing a favourable deal. 

A Faster Timeline

Compared to waiting for a newly constructed condo to be completed, assignment sale transactions often result in faster possession for the buyer. Once the deal is finalized, the new buyer can move in sooner than if they had waited for the entire construction process to conclude, making it an attractive option for those eager to settle into their new home swiftly.

Because you’re buying further on in the construction process, assignment sales can also come with greater peace of mind. Buying a unit in a  building that has already been through the initial stages of construction can help you avoid some of the risks associated with new developments. For instance, issues such as construction delays, changes in project scope, or unforeseen challenges could already be sorted out before your purchase. 

Thinking about buying a pre-construction condo? Explore these helpful articles from our blog for more advice. 

• Working With an Agent When Buying a Pre-construction Condo
• An Investor’s Guide to Pre-construction Condos
• What Happens if My Pre-construction Condo is Delayed?

What Are the Special Considerations?

While there are a lot of advantages to buying an assignment sale condo, there are a few unique factors to be aware of. 

Approval From the Developer 

Most developers have specific clauses in their contracts regarding the assignment of units. With that in mind, you will likely need to obtain the developer’s approval before proceeding with the assignment sale. This process often involves a thorough review of the new buyer’s financial stability and meeting certain criteria outlined by the developer. While not a major inconvenience, it will extend your buying timeline. 

Additional Fees

Because the property developer will play a role in approving your assignment sale purchase, there may be additional fees or costs to be mindful of. While you approach the transaction, your real estate agent can help you identify (and negotiate on) any hidden or add-on fees. 

Ready to Find a Great Condo?

If you’re looking to purchase a condo, the best place to start is with an experienced and well-connected real estate professional – like us the Lino Arci Team. As long-standing leaders in Vaughan Real Estate, we’re experts in all corners of our local market – including pre-construction condo assignment sales. Whatever your ideal property looks like, we can help you find a place that suits your vision and budget. Reach out to our team today. 

Ready to find the perfect condo to begin your homeownership journey? Work with the #1 real estate team in Vaughan! Call 416-571-2724 or send an email to info@arciteam.com today.