assignment sale process

Greater Toronto Area Real Estate

Toronto | Mississauga | Hamilton | Durham

Call Us Anytime: 416-274-2068

Prefer Text? 416-568-0427

Looking for Bspoke Realty?

10 Essential Things to Know About Real Estate Assignment Sales (for Sellers)

— We take our content seriously. This article was written by a real person at BREL.

What’s an assignment?

An assignment is when a Seller sells their interest in a property before they take possession – in other words, they sell the contract they have with the Builder to a new purchaser. When a Seller assigns a property, they aren’t actually selling the property (because they don’t own it yet) – they are selling their promise to purchase it, along with the rights and obligations of their Agreement of Purchase and Sale contract.  The Buyer of an assignment is essentially stepping into the shoes of the original purchaser.

The original purchaser is considered to be the Assignor; the new Buyer is the Assignee. The Assignee is the one who will complete the final sale with the Builder.

Do assignments only happen with pre-construction condos?

It’s possible to assign any type of property, pre-construction or resale, provided there aren’t restrictions against assignment in the original contract. An assignment allows a Buyer of a any kind of home to sell their interest in that property before they take possession of it.

Why would someone want to assign a condo?

Often with pre-construction sales, there’s a long time lag between when the original contract is entered into, when the Buyer can move in (the interim occupancy period) and the final closing. It’s not uncommon for a Buyer’s circumstances to change during that time…new job out of the city, new husband or wife, new set of twins, etc. What worked for a Buyer’s lifestyle 4 years ago doesn’t always work come closing time.

Another common reason why people want to assign a contract is financial. Sometimes, the original purchaser doesn’t have the funds or can’t get the financing to complete the sale, and it’s cheaper to assign the contract to a new purchaser, than it is to renege on the sale.

Lastly, assignment sales are also common with speculative investors who buy pre-construction properties with no intention of closing on them. In these cases, the investors are banking on quick price appreciation and are eager to lock in a profit now, vs. waiting for the original closing date.

What can be negotiated in an assignment sale?

Because the Assignee is taking over the original purchaser’s contract, they can’t renegotiate the price or terms of the contract with the Builder – they are simply taking over the contract as it already exists, and as you negotiated it.

In most cases, the Assignee will mirror the deposit that you made to the Builder…so if you made a 20% deposit, you can expect the new purchaser to do the same.

Most Sellers of assignments are looking to make a profit, and part of an assignment sale negotiation is agreeing on price. Your real estate agent can guide you on price, which will determine your profit (or loss).

Builder Approval and Fees

Remember that huge legal document you signed when you made an offer to buy a pre-construction condo? It’s time to take it out and actually read it.

Your Agreement of Purchase & Sale stipulated your rights to assign the contract. While most builders allow assignments, there is usually an assignment fee that must be paid to the Builder (we’ve seen everything from $750 to $7,000).

There may be additional requirements as well, the most common being that the Builder has to approve the assignment.

Marketing Restrictions

Most pre-construction Agreements of Purchase & Sale from Toronto Builders do not allow the marketing of an assignment…so while the Builder may give you the right to assign your contract, they restrict you from posting it to the MLS or advertising it online. This makes selling an assignment extremely difficult…if people don’t know it’s available for sale, how they can possibly buy it?

While it may be very tempting to flout the no-marketing rule, BE VERY CAREFUL. Buyers guilty of marketing an assignment against the rules can be considered to have breached the Agreement, and the Builder can cancel your contract and keep your deposit.

We don’t recommend advertising an assignment for sale if it’s against the rules in your contract.

So how the heck can I find a Buyer?

There are REALTORS who specialize in assignment sales and have a database of potential Buyers and investors looking for assignments. If you want to be connected with an agent who knows the ins and outs of assignment sales, get in touch…we know some of the best assignment agents in Toronto.

What are the tax implications of real estate assignment?

Always get tax advice from a certified accountant, not from the internet (lol).

But in general, any profit made from an assignment is taxable (and any loss can be written off). The new Buyer or Assignee will be responsible for paying land transfer taxes and any HST that might be due.

How much does it cost to assign a pre-construction condo?

In addition to the Builder assignment fees, you will likely have to pay a real estate commission (unless you find the Buyer yourself) and legal fees. Because assignments are more complicated, you can expect to pay higher legal fees than you would for a resale property.

How does the closing of an assignment work?

With assignment sales, there are essentially 2 closings: the closing between the Assignor and the Assignee, and the closing between the Assignee and the Builder. With the first closing (the assignment closing) the original purchaser receives their deposit + any profit (or their deposit less any loss) from the Assignee. On the second closing (between the Builder and the Assignee), the Assignee pays the remaining amount to the Builder (usually with the help of a mortgage), and pays land transfer taxes. Title of the property transfers from the Builder to the Assignee at this point.

I suppose it could be said that there is a third closing too, when the Buyer takes possession of the property but doesn’t yet own it…this is known as the interim occupancy period. The interim occupancy occurs when the unit is ready to be occupied, but not ready to be registered with the city. Interim occupancy periods in Toronto range from a few months to a few years. During the interim occupancy period, the Buyer occupies the unit and pays the Builder an amount roughly equal to what their mortgage payment + condo fees + taxes would be. The timing of the assignment will dictate who completes the interim occupancy.

Assignments vs. Resale: Which is Better?

We often get calls from people who are debating whether they should assign a condo they bought, or wait for the building to register and then sell it as a typical resale condo.

Pros of Assigning vs. Waiting

• Get your deposit back and lock in your profit sooner
• Avoid paying land transfer taxes
• Avoid paying HST
• Maximize your return if prices are declining and you expect them to continue to decline
• Lifestyle – sometimes it just makes sense to move on

Cons of Assigning vs Waiting

• The pool of Buyers for assignment sales is much smaller than the pool of Buyers for resale properties, which could result in the sale taking a long time, getting a lower price than you would if you waited, or both.
• Marketing restrictions are annoying and reduce the chances of finding a Buyer
• Price – What is market value? If the condo building hasn’t registered and there haven’t been any resales yet, it can be difficult to determine how much the property is now worth. Assignment sales tend to sell for less than resale.
• Assignment sales can be complicated, so you want to make sure that you’re working with an agent who is experienced with assignment sales, and a good lawyer.

Still thinking of assignment your condo or house ? Get in touch and we’ll connect you with someone who specializes in assignment sales and can take you through the process.

Search by keyword or select a category below.

• Market Updates
• First Time Buyers
• 65+ Real Estate
• Aging in Place
• Mississauga
• Real Estate Crushes
• For Realtors

Raj Singh says:

What can be things to look for, especially determining market value for an assigned condo? I’m the assignee.

Sydonia Moton says:

Y would u need a lawyer when u buy a assignment property

Gideon Gyohannes says:

Good clear information!

Who pays the assignment fee to the developer? Assignor or Assignee?

Thanks Gideon 416 4591919

Melanie Piche says:

It’s almost always the Seller (though I suppose could be a point of negotiation).

Fiona Rourke says:

If there are 2 names on the agreement and 1 wants to leave and the other wants to remain… does the removing of 1 purchaser constitute an assignment

Brendan Powell says:

An assignment is one way to add or remove people from a contract, but not the only way…and not the simplest. Speak to your lawyer for advice on what makes the most sense for your specific situation. For a straightforward resale purchase you could probably just do an amendment signed by all parties. If it’s a preconstruction purchase with various deposits paid, etc it could be more complicated.

Katerina says:

Depends on the Developer. Some of them remove names via assignments only.

Haroon says:

Is there any difference in transaction process If assigner or seller of a pre constructio condo is a non resident ? Is seller required to get a clearance certificate from cRA to complete the transaction ?

Nathalie says:

Hello , i would like to know the exact steps for reassignment property please.

Amazing info. Thanks team. I may just touch base with you when my property in Stoney Creek is completed in. 2020. I may need to reassign it to someone Thanks

Victoria Bachlowa says:

If an assignor renegs on the deal and refuses to close because they figured out they could get more money and the assignment was already approved by the builder and all conditions fulfilled what can the Assignee do. I have $33,000 dollars in trust in the real estate’s trust fund. They sent me a mutual release which I have not signed. The interim occupancy is Feb. 1 and the closing is schedule for Mar. 1, 2019. I have financing in place, was ready to move in Feb. 1 and I have no where to live.

Definitely talk to your lawyer right away. They’ll want to look at your agreement of purchase and sale and will be able to advise you.

With assignment sales, there are essentially 2 closings: the closing between the Assignor and the Assignee, and the closing between the Assignee and the Builder. With the first closing (the assignment closing) the original purchaser receives their deposit + any profit (or their deposit less any loss) from the Assignee. Can I assume that these closing happen at the same time? I’m not sure how and when I would be paid as the Assignor.

What happens to the deposits or any profits already paid if the developer cancels the project after an assignment?

Hi, Did you get answer to this? I did an assignment sale last year and now the builder is not completing apparently and they are asking for their money back. Can they do that? After legal transactions, the lawyer simply said “the deal didn’t go through”. Apparently builder and the person who assumed the assignment agreed on taking out the deal. What do I have to pay back after it was done a year ago

This is definitely a question for your lawyer – as realtors we are not involved in that part of the transaction. I would expect that just as the builder would have to refund your deposits, you would likely need to do the same…but talk to your lawyer. As to whether the builder can cancel a project, yes they always reserve that right (but the details of how and under what circumstances would be in your original purchase agreement). It’s one of the annoying risks in buying preconstruction!

I completed the sale of my assignment in Dec 2015 however the CRA says I should be reporting the capital income in 2016 when the assignee closed his deal with the developer in July 2016. That makes no sense to me since I got all my money in Dec 2015. Can you supply any clarification on that CRA policy please?

You’d have to talk to the CRA or an accountant – we’re real estate agents,so we can’t give tax advice.

Hassan says:

Hello, You said that there are two closings. The first one between the assignor and the assignee and the second one between the builder and the new buyer (assignee). My question is that in the first closing does the assignee have to pay the assignor the deposit they have paid and any profit in cash or will the bank add this to the assignee’s mortgage?

The person doing the assigning usually gets their money at the first closing.

Kathy says:

What is the typical real estate free to assign your contract with the builder ?

Hi Kathy While we do few assignments (as they are rarely successful, and builders do not make it easy), in past we have charged more or less the same as we do for a typical resale listing. While there are elements to assignments that should be easier than a resale (eg staging), many other aspects of assignments are much MORE time-consuming, and the risk much higher since attempts to find a buyer for assignments are often unsuccessful. It’s also important to note that due to the extra complication, lawyer’s fees to assign are typically higher than resale as well–although more $ for the purchase side vs the sale side.

Mitul Patel says:

If assignee has paid small amount of deposit plus the original 25% deposit that the assignor has paid to the builder and gets the Keys to the unit since interim possession has been completed, when the condo registration is done and assignee is getting mortgage from the Bank or Pays the remaining balance to the Builder using his savings and decides not to pay the Balance of the Profit amount to Assignor, what are the possibilities in this kind of scenario?

You’d need to talk to a lawyer to find out the options.

David says:

How much exactly do brokers get paid at sale of Assignment? i.e. Would the broker’s fee be a % of your assignment selling price or your home’s selling price? I’m really looking for a clear answer.

I am using this website’s calculator associated with selling your home in Ontario. But there is no information on selling assignments. https://wowa.ca/calculators/commission-calculator-ontario

Realtors set their own commission, so there is no set fee- that website is likely the commission that that agent offers. We often see commissions of 4-5% for assignments. The fee is a % of the price of the assignment – for example, you originally bought for $500K; you’re now assigning for $600K – commission would be payable on the $600K.

Candace says:

Question: if i bought a pre construction condo, can i sell it as soon as it closes or do i have to live in it for 1 year after closing in order to avoid capital gains taxes?

Or does the 1 year start as soon as you move in?

I would suggest you talk to your accountant re: HST credit implications and capital gains, but if you sell it for more than you paid for it, capital gains usually apply.

You mention avoid paying HST when you assign your property. What is the HST based on? It’s not a commercial property that you would pay HST. Explain. Thanks.

HST and assignments are complex and this question is best answered specific to your situation by your accountant and real estate lawyer. In some cases HST is applicable on assignment profits – more details can be found on the CRA website here:

https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/gi-120/assignment-a-purchase-sale-agreement-a-new-house-condominium-unit.html

If you are a podcast listener, the true condos podcast is also a great resource.

https://truecondos.com/cra-cracking-down-on-assignments/

heres one for your comment, purchase pre construction from builder beginning of 2021, to be finished end of 2021, (semi detached) here we are end of 2022, both units are now ready. Had one assigned but because builder didnt accept within certain time frame(they also had a 90 day clause wherein we couldnt assign prior to 90 less firm closing date (WHICH MOVED 4 TIMES). Anyrate now we have a new assinor but the builder says we are in default from the first one and wants 50k to do the assignment (the agreement lists the possibility of assigning for 12k) Also this deal would include us loosing our whole deposit and paying the 12k(plus fees) would be in addition too the 130k we are already loosing. The second property we are trying to close but interest rates are riducous, together with closing costs(currently mortgage company is asking that my wife be added to that one, afraid to even ask this builder. Any advice on how to deal with this asshole greedy builder? We are simply asking for assignment as per contract and a small extension for the new buyer(week or two) Appreciate any advice. Thank you

Dealing with builders/developers can be extremely painful, much worse than resale transactions in our experience. Their contracts are written to protect THEM. Unfortunately all I can say is follow the advice of your lawyer.

Leave A Comment Cancel Reply

Your email address will not be published. Required fields are marked *

Like What You're Reading?

• Email This field is for validation purposes and should be left unchanged.

March 22, 2024

Real Estate Definition: Assignment Sale

When a buyer enters into a purchase agreement for a pre-constructed or newly built property, they may find themselves in a situation where they no longer wish to proceed with the purchase. In such cases, the buyer can assign their rights and obligations under the agreement to a new buyer – and this is where an assignment sale comes in.

What is an Assignment Sale?

An assignment sale refers to a sales transaction in which the original buyer of a property (“assignor”) transfers their rights and obligations of the Agreement of Purchase and Sale to another buyer (“assignee”) before the original buyer takes possession of the property. The assignee then becomes responsible for completing the deal with the seller. Essentially, an assignment clause allows the buyer to sell the property before they move in. While assignment sales can occur with both homes and condos , they are more common among buyers of pre-construction condos.

Factors to Consider Before Entering an Assignment Sale

While assignment sales can be advantageous, it is crucial for both the original buyer and the new buyer to consider certain factors before entering into such transactions.

Developer’s Consent

Before proceeding with an assignment sale, you must obtain the developer’s consent. Some developers may have strict rules or restrictions, and failure to comply can lead to legal complications.

Assignment Fees

The assignor may charge an assignment fee to the new buyer for transferring their rights and obligations. This fee can vary depending on the market conditions and the specific terms of the Assignor-Assignee Agreement.

Legal Advice

Both parties should seek legal advice before entering into an assignment sale. This ensures that all parties understand their rights, obligations, and potential risks associated with the transaction.

How Does an Assignment Sale Work?

Before proceeding with an assignment sale, the original buyer must obtain the consent of the developer or builder. This step is crucial as some developers may have specific rules or restrictions regarding assignment sales. When the developer consents, the original buyer can look for a new buyer to take over the purchase agreement.

Once there’s a new buyer, both the original buyer and the new buyer (assignee) enter into an agreement known as the Assignor-Assignee Agreement. This agreement outlines the terms and conditions of the assignment sale, including the assignment fee, if any. Then, the developer will review the Assignor-Assignee agreement and may require additional documentation or fees.

Once the developer approves the assignment sale, the closing process begins. At this stage, the new buyer is responsible for completing the purchase, including paying any remaining balance to the developer.

Why Do Assignment Sales Happen?

One primary reason why assignment sales happen is a change of plans. People may decide to leave the area due to personal circumstances such as starting a family, getting married, or looking for job opportunities elsewhere. Additionally, some individuals may face financial challenges that prevent them from completing the purchase.

Alternatively, a common scenario involves investors who never intended to close on the property acquisition. A popular investment strategy is to purchase a property during its early release to take advantage of the emerging market and low pricing and sell it before incurring land transfer taxes, HST, or becoming tied to a mortgage.

Benefits of Assignment Sales

Assignment sales can offer several benefits to both the assignor and the assignee. Some of these benefits include:

Profit Potential

For the original buyer, an assignment sale provides an opportunity to make a profit without completing the purchase. If the market value has increased since the initial purchase agreement, the assignor can sell their rights at a higher price.

Opportunity for Early Ownership

The assignee can benefit from an assignment sale to gain early ownership of a pre-construction property. This can be particularly appealing for individuals looking to invest in real estate or those with specific requirements for a new home.

Flexibility

Assignment sales offer flexibility to both parties involved. The original buyer can exit the purchase agreement without incurring significant penalties, while the new buyer can secure a property without going through the entire pre-construction process.

How a Real Estate Agent Can Help You Navigate this Process

Assignment sales are a complicated process; working with an experienced real estate agent who can help you navigate and understand the ins and outs of this transaction is crucial. These professionals can not only assist you in marketing your assignment, but they can also overcome any limitations imposed by the builder. Moreover, agents have a vast network and can easily connect you with an interested buyer. Although assignment sales may seem daunting, having a skilled lawyer and an experienced realtor is a smart financial move!

More to Explore

Thrifty Tips for a More Luxurious Home

May 28, 2024

What’s Happening in the Atlantic Canada Housing Market?

May 27, 2024

10 Expert Tips for Staging Your Home

The Pros and Cons of Owning Commercial Real Estate

May 26, 2024

Navigating Home Inspections: A Guide for First-Time Buyers

May 25, 2024

Farmland Investment: Growing More Scarce and Valuable Every Year

May 24, 2024

Is Investing in Canadian Real Estate Still a Good Idea?

Why Selling a Cottage Now To Save on Capital Gains Tax Could Cost You More

May 23, 2024

The Financial Upside of Downsizing

May 22, 2024

Find the Right Agent

Sign up for our newsletter, next steps: sync an email add-on.

*RE/MAX, LLC, 5075 S. Syracuse St., Denver CO, 80237; RE/MAX Western Canada and RE/MAX Ontario-Atlantic, 639 Queen Street West, Toronto, ON M5V 2B7, 905-542-2400

The Lourantos Group

: 416-505-7975

: [email protected]

A Comprehensive Guide To Selling Your Assignment Condo

Trying to resell your preconstruction condo before closing? This blog is for you. Assignment sales are more complicated compared to their resale counterparts, but with some guidance, the process is easy. 

An assignment sale is a sale where the original buyers of a condo or home resell their contract to another buyer before closing. The most common type of assignment is a preconstruction condo assignment. Preconstruction condo assignments are prevalent because of the time lag between purchasing the home and the move-in date. While condo assignments might be the most popular type of assignment, any real estate contract is assignable. This blog is going to discuss condo assignments since they are the most prevalent, but *most* of the details apply to assigning a home or commercial preconstruction property as well.

In the GTA, our preconstruction market is booming. Toronto alone sees around 30,000 new home completions a year. Around 70% of preconstruction purchasers are investors. The remaining 30% of buyers are end-users who plan to use the property themselves. However, many investors, and end-users, might decide to sell the property before the final closing. Since there is no title to transfer, these buyers have to assign their contract to the next buyer. 

What is a preconstruction condo assignment sale?

An assignment is when the original buyers of a preconstruction condo decide to sell their contract with the builder to another buyer before the home is complete. This differs from a regular real estate transaction because we are not buying or selling a home, rather we are buying or selling an interest in a contract to purchase a home once it’s complete. Essentially, the buyers are taking over the seller’s place in the contract with the builder. The new buyer pays the seller their deposits back, as well as any profit. In trying times, there might not be profit, and in extreme cases, the sellers might walk away from their deposits.

Assignments are like the wild-west equivalent of real estate. The buyers are called assignees, the sellers are called assignors, and there is no fixed closing date! You heard that right, the buyer purchases the contract not knowing whether it will close in 4 weeks, 6 weeks, or 8 weeks. In many cases, the buyers only have a rough estimate for the final closing of the property as well.

Every builder’s agreement of purchase and sale is different, so every assignment sale is different. You need legal and accounting advice before, during, and after an assignment sale. A real estate agent’s job in the transaction is to find a buyer, negotiate the contract, and coordinate the sale from start to finish. Your real estate agent might also connect you with accountants, and lawyers who can help make the necessary legal and tax declarations.

The Builder’s Role In Assignments:

Sellers often misinterpret their rights to assign in their purchase agreements with their builder. In the showroom, builders are quick to say their contract is assignable if you want to flip your contract before closing. However, builders can control when, how, and to whom you sell your contract.

It’s important to follow the rules set out by your builder when marketing your assignment. Deviating from the builder’s purchase contract can result in you losing your deposits!

Since all preconstruction home assignments require the builder’s consent, it’s important to prepare the file for their consent at your earliest convenience. The builder will want the same information they collected from you when you first purchased the home: full names, current address, sin, IDs (front and back), telephone number, emails, mortgage pre-approval letter,  lawyer information… they will also want the buyer to replace all your cheques. Those could be cheques for future deposits, or cheques for interim occupancy fees. It’s important to advise the buyers to prepare all of this information before submitting the file to the builder, so there is limited delay assigning the property.

How do you sell an assignment condo?

The first step to selling your assignment is to review your original purchase agreement. The builder’s purchase agreement outlines restrictions and fees associated with assignments. An experienced realtor or lawyer can also review the contract with you. Next, email your builder’s customer service account and ask for permission to advertise the property for sale.

It’s important to thoroughly understand your preconstruction agreement, because some incentives offered to you might not be transferable to the buyer. Builders often offer incentives to direct buyers to stimulate sales. However, they sometimes make these incentives non-transferable. That could mean the free design dollars, or the capped development levies might not be available to the next buyer. It’s important not to advertise incentives that aren’t transferable.

The second step is to hire a Realtor to advise you on current market conditions. Your realtor will discuss marketing options as well as help you decide on a market price. There is a strong chance the builder will prohibit MLS listings of their properties. However, many builders will allow online marketing in places like Facebook, Instagram, WhatsApp, and brokerage websites.

While Realtor.ca is the best marketing platform out there, buyers looking for assignments know to look elsewhere. Don’t worry if you cannot market on realtor.ca. One of the advantages of Sotheby’s International Realty Canada is our vast marketing platform outside of Realtor.ca

Important Dates:

The first date you need to consider is the assignment closing date. This is the date the assignee officially takes over the contract from the assignor. On average, assignment closing happens within 3-6 weeks after an offer is accepted. This is when the assignee becomes the new owner of the property, and the assignee receives some of their deposit/profit back.

The second date to consider is the interim occupancy date. When buying preconstruction condos, there is usually a period between when the unit is ready for occupancy and before the building has registered with the city. Since no title exists yet, you cannot get a mortgage. Instead, during this time, you move in and pay the builder rent until final closing. Interim occupancy can last from months to years. During interim occupancy, buyers have the chance to view the unit which could help sell the home. Interim occupancy is when most assignment sales take place.

The third date you need to know is the final closing date. This is the date that the building registers with the city and the assignee pays the builder the balance of the purchase price, land transfer taxes, closing costs etc. Sometimes, assignees will negotiate to pay some of the assignors profit on final closing date, so they can roll it into the mortgage.

What Is Negotiable During An Assignment Sale:

Since the contract with the builder is already firm and binding, there can be no changes to that contract. The buyer is merely stepping into the seller’s shoes, in exchange for their deposits and profits. The assignment contract negotiates the purchase price and the deposit structure. The purchase price will indicate how much profit (or loss) the assignor receives in the transaction.

The payment schedule of an assignment is dependent on whether there is a profit or not. If the seller is making a profit or breaking even, then the buyers are expected to refund the full deposit paid-to-date by the sellers. In many cases, that is 20% of the original purchase price. If the seller is losing money on the assignment, then the buyers will bring a deposit for less than the deposits already paid to the seller. The deposit is due upon acceptance of the offer.

If there is profit, the assignee and assignor will negotiate when that profit is paid out. Remember when we mentioned the three important dates? the assignment closing, the interim occupancy date, and the final closing date? well, when it comes to negotiating when to pay the assignor their profit, we usually pick one of these dates to pay out the assignor’s profit.

The expected final closing is an important consideration for buyers when negotiating when to pay the assignor’s profit. The longer the final closing date, the more risk for the buyer. The reason? there is always a small risk the condo developer cancels the project. If a condo developer cancels the project, the buyers are returned their deposits paid-to-date. However, if a buyer has paid an assignor $100,000 in profit, that money is gone. So if there is a long closing, expect buyers to protect their final deposits by delaying it till interim occupancy, or final closing.

Conditions In Assignment Sales

After finding a buyer, the first hurdle to overcome is negotiating a fair deal. Once both parties are satisfied with the terms of the contract, we make the deal conditional on the lawyer’s review. This gives both the buyer and seller a chance to have the assignment contract, as well as the original purchase agreement, reviewed by a lawyer. Once both parties have spoken to their lawyers and are happy to continue, we put the deal to the developer to approve the new buyer. This condition usually lasts around 30 days. If the developer does not approve the new buyer within 30 days, the deal will become null and void, unless the buyer and seller both agree to extend that condition.

Once the developer accepts the buyer, the assignment will happen within a few days. Most contracts outline an assignment closing within 5 business days after the developer gives their consent. Some buyers will also include financing conditions in their assignment offer, so they have time to run the deal past their mortgage broker. However, most assignments are purchased with only lawyer review and developer consent conditions.

Here’s an example of selling an assignment for profit vs selling an assignment for a loss:

Below are four examples of the deposit/profit payment schedule for assignments.

Example 1 is a fantastic example of a preconstruction condo that appreciated $100,000. In this typical example, the assignee and assignor agreed to a deposit big enough to return all of the assignor’s deposits, as well as some extra profit to cover Realtor commissions. This deposit is usually transferred to the listing brokerage within 1 day of the offer being accepted and is released to the assignor on assignment closing. In this example, the assignor and assignee also agreed to pay the seller the rest of their profit at the final closing.

Example 2 shows the same conditions for the sale, except the assignee agreed to pay the assignor their full deposit and all their profit on the assignment closing date, instead of the final closing date.

Example 3 looks at an assignment where the assignor is taking a $100,000 loss. Instead of being paid their whole deposit on assignment closing, they are paid their deposit minus the difference between the purchase price and the sale price.

Example 4 is a rare case, where the market has turned significantly and the assignor is looking to transfer their assignment for $0. This means the assignor is walking away from all their deposits and will take no money to transfer their contract to the assignee.

What Does It Cost To Sell An Assignment condo:

The major fees when selling an assignment include the builder’s assignment fee, real estate commissions, and tax on the profit. Builder’s assignment fees usually range from $1500-$25,000 (in some extreme cases they go as high as $80,000). The assignor usually pays both the assignor and the assignee’s realtor commissions. The commission is something to negotiate with your agent. The total commission is usually 5% or less of the final sale price. There are likely taxes such as income tax, capital gains tax, or HST on the sale as well. Speak to your accountant about taxes due on the assignment sale.

Taxes due on an assignment sale:

The taxes on assignments are simple, however, buyers and sellers often confuse the HST taxes. That’s because there are two different HST taxes when talking about preconstruction assignments. Let’s clarify this! All new homes are subject to HST, however, end-users don’t notice the HST tax because the builder pays it and claims a $24,000 rebate on the end-user’s behalf. Alternatively, investors who purchase a pre-construction home are charged around $24,000 in HST, and are then able to claim a rebate for the HST they paid, if they rent the property out for one year. There are situations where an assignment will lose its eligibility for the HST rebate. If someone has lived in the home during interim occupancy, it will no longer be eligible for the end-user HST rebate.

The second HST tax we discuss when selling an assignment is the HST due on the profit. In many cases, the profit is subject to a 13% HST tax. In some cases, even the return of deposits is subject to HST.

The third tax is the income or capital gains tax on the profit. Any real estate property that is not your primary residence, as well as any business venture, is taxable as either a capital gain or as income. It’s really important to speak to an accountant before selling your assignment. Only an accountant can advise you whether you owe HST, capital taxes, or income taxes on your assignment sale.

Is it better to sell an assignment or wait till the condo is ready?

The pros to assigning a condo:

• Receive your deposits and profit sooner
• Avoid market risks. Savvy investors might look to assign their property if they sense the market might depreciate in the coming months/years.
• Avoid paying closing costs (land transfer taxes, development levies, utility hookups, and more). These usually come to a little more than 5.5% of the purchase price
• No mortgage or financing required
• Minimize holding costs (if you sell before interim occupancy or before final closing, there are no property taxes, maintenance fees, utility fees, insurance, mortgage, etc)

Cons to assigning a condo

• Developer restrictions (limiting the marketing of the property, limiting when they are accepting assignments)
• Market perception and buyer’s hesitancy when buying a property sight-unseen
• Market fluctuations suppressing buyer demand
• Limited buyer pool and most of the buyers are investors who want a good deal
• Usually sell for a lower price than comparable resale properties
• Financing challenges for the buyer if the property does not appraise at the new purchase price
• Potentially more taxes compared to closing and reselling

The most common mistakes when selling an assignment:

Hiring the wrong representation, or not relying on professional advice:.

As active realtors in the assignment market, we come across quite a few mistakes. But most of them could be avoided if the buyers and sellers were represented by experienced realtors and lawyers. The agreement of purchase and sale for an assignment is very different compared to an agreement of purchase and sale for a resale home. One of the most common mistakes we see from buyers and sellers is assuming the paperwork their realtors drafted is correct, and forgoeing their right to have their lawyer review the assignment paperwork.

Poor communication/understanding:

This happened to my assignment buyers recently. They purchased a home where the seller’s representative told us the finishes had not been chosen yet. We protected our buyers by including clauses to that degree. However, a few days after the assignment closing, we learned the sellers chose the finishes a few days before closing. Luckily, the developer allowed the buyer to make changes to the finishes at an additional fee.

Ignoring deadlines or dragging your feet:

Assignments come with a lot of moving deadlines, and there are a lot more parties involved compared to a resale property. Always return paperwork and signatures as soon as possible. Compared to a resale property where the only parties are the buyer, seller, and their agents and lawyers, an assignment involves the developer, the developer’s lawyers, the buyer and seller agents, and the buyer and seller lawyers. If everyone took 3 days to return paperwork, the conditional period would lapse and the deal would become null and void.

Incomplete Buyer Vetting:

Buying an assignment requires the assignee to have their mortgage preapproval, as well as their purchase funds available very shortly. If the assignee does not have a mortgage preapproval on hand, it could delay the developer accepting the assignment. If they do not have their funds available it could delay the quick closing as well.

It’s important to thoroughly vet buyers because some builders require the assignor to close in the rare chance the assignee cannot close.

Misunderstanding fees:

Builder’s contracts are not standard forms, and their deposit structures and closing fees can vary from site to site. There are a lot of potential fees when buying and selling assignments and they include, but are not limited to: deposits, seller’s profits, upgrades, lawyer’s fees, interim occupancy rent, utility set-up fees, development levies, realtor commissions, accountant fees, HST, and income taxes. These fees can vary from deal to deal, and when they are payable is different in every assignment. For example, some developers require the homeowner to pay for upgrades when they are chosen, and others charge for the upgrades at final closing.

If you have a preconstruction condo or home that you are thinking of assigning. Feel free to reach out to us for some advice and insight.

Related posts.

Everything you need to know to sell your preconstruction condo assignment

6 important facts to consider when selling a preconstruction condo.

• Coaching Team
• Investor Tools
• Student Success

Real Estate Investing Strategies

• Real Estate Business
• Real Estate Markets
• Real Estate Financing
• REITs & Stock Investing

How To Navigate The Real Estate Assignment Contract

What is assignment of contract?

Assignment of contract vs double close

How to assign a contract

Assignment of contract pros and cons

Even the most left-brained, technical real estate practitioners may find themselves overwhelmed by the legal forms that have become synonymous with the investing industry. The assignment of contract strategy, in particular, has developed a confusing reputation for those unfamiliar with the concept of wholesaling. At the very least, there’s a good chance the “assignment of contract real estate” exit strategy sounds more like a foreign language to new investors than a viable means to an end.

A real estate assignment contract isn’t as complicated as many make it out to be, nor is it something to shy away from because of a lack of understanding. Instead, new investors need to learn how to assign a real estate contract as this particular exit strategy represents one of the best ways to break into the industry.

In this article, we will break down the elements of a real estate assignment contract, or a real estate wholesale contract, and provide strategies for how it can help investors further their careers. [ Thinking about investing in real estate? Register to attend a FREE online real estate class and learn how to get started investing in real estate. ]

What Is A Real Estate Assignment Contract?

A real estate assignment contract is a wholesale strategy used by real estate investors to facilitate the sale of a property between an owner and an end buyer. As its name suggests, contract assignment strategies will witness a subject property owner sign a contract with an investor that gives them the rights to buy the home. That’s an important distinction to make, as the contract only gives the investor the right to buy the home; they don’t actually follow through on a purchase. Once under contract, however, the investor retains the sole right to buy the home. That means they may then sell their rights to buy the house to another buyer. Therefore, when a wholesaler executes a contact assignment, they aren’t selling a house but rather their rights to buy a house. The end buyer will pay the wholesale a small assignment fee and buy the house from the original buyer.

The real estate assignment contract strategy is only as strong as the contracts used in the agreement. The language used in the respective contract is of the utmost importance and should clearly define what the investors and sellers expect out of the deal.

There are a couple of caveats to keep in mind when considering using sales contracts for real estate:

Contract prohibitions: Make sure the contract you have with the property seller does not have prohibitions for future assignments. This can create serious issues down the road. Make sure the contract is drafted by a lawyer that specializes in real estate assignment contract law.

Property-specific prohibitions: HUD homes (property obtained by the Department of Housing and Urban Development), real estate owned or REOs (foreclosed-upon property), and listed properties are not open to assignment contracts. REO properties, for example, have a 90-day period before being allowed to be resold.

What Is An Assignment Fee In Real Estate?

An assignment fee in real estate is the money a wholesaler can expect to receive from an end buyer when they sell them their rights to buy the subject property. In other words, the assignment fee serves as the monetary compensation awarded to the wholesaler for connecting the original seller with the end buyer.

Again, any contract used to disclose a wholesale deal should be completely transparent, and including the assignment fee is no exception. The terms of how an investor will be paid upon assigning a contract should, nonetheless, be spelled out in the contract itself.

The standard assignment fee is $5,000. However, every deal is different. Buyers differ on their needs and criteria for spending their money (e.g., rehabbing vs. buy-and-hold buyers). As with any negotiations , proper information is vital. Take the time to find out how much the property would realistically cost before and after repairs. Then, add your preferred assignment fee on top of it.

Traditionally, investors will receive a deposit when they sign the Assignment of Real Estate Purchase and Sale Agreement . The rest of the assignment fee will be paid out upon the deal closing.

Assignment Contract Vs Double Close

The real estate assignment contract strategy is just one of the two methods investors may use to wholesale a deal. In addition to assigning contracts, investors may also choose to double close. While both strategies are essentially variations of a wholesale deal, several differences must be noted.

A double closing, otherwise known as a back-to-back closing, will have investors actually purchase the home. However, instead of holding onto it, they will immediately sell the asset without rehabbing it. Double closings aren’t as traditional as fast as contract assignment, but they can be in the right situation. Double closings can also take as long as a few weeks. In the end, double closings aren’t all that different from a traditional buy and sell; they transpire over a meeter of weeks instead of months.

Assignment real estate strategies are usually the first option investors will want to consider, as they are slightly easier and less involved. That said, real estate assignment contract methods aren’t necessarily better; they are just different. The wholesale strategy an investor chooses is entirely dependent on their situation. For example, if a buyer cannot line up funding fast enough, they may need to initiate a double closing because they don’t have the capital to pay the acquisition costs and assignment fee. Meanwhile, select institutional lenders incorporate language against lending money in an assignment of contract scenario. Therefore, any subsequent wholesale will need to be an assignment of contract.

Double closings and contract assignments are simply two means of obtaining the same end. Neither is better than the other; they are meant to be used in different scenarios.

Flipping Real Estate Contracts

Those unfamiliar with the real estate contract assignment concept may know it as something else: flipping real estate contracts; if for nothing else, the two are one-in-the-same. Flipping real estate contracts is simply another way to refer to assigning a contract.

Is An Assignment Of Contract Legal?

Yes, an assignment of contract is legal when executed correctly. Wholesalers must follow local laws regulating the language of contracts, as some jurisdictions have more regulations than others. It is also becoming increasingly common to assign contracts to a legal entity or LLC rather than an individual, to prevent objections from the bank. Note that you will need written consent from all parties listed on the contract, and there cannot be any clauses present that violate the law. If you have any questions about the specific language to include in a contract, it’s always a good idea to consult a qualified real estate attorney.

When Will Assignments Not Be Enforced?

In certain cases, an assignment of contract will not be enforced. Most notably, if the contract violates the law or any local regulations it cannot be enforced. This is why it is always encouraged to understand real estate laws and policy as soon as you enter the industry. Further, working with a qualified attorney when crafting contracts can be beneficial.

It may seem obvious, but assignment contracts will not be enforced if the language is used incorrectly. If the language in a contract contradicts itself, or if the contract is not legally binding it cannot be enforced. Essentially if there is any anti-assignment language, this can void the contract. Finally, if the assignment violates what is included under the contract, for example by devaluing the item, the contract will likely not be enforced.

How To Assign A Real Estate Contract

A wholesaling investment strategy that utilizes assignment contracts has many advantages, one of them being a low barrier-to-entry for investors. However, despite its inherent profitability, there are a lot of investors that underestimate the process. While probably the easiest exit strategy in all of real estate investing, there are a number of steps that must be taken to ensure a timely and profitable contract assignment, not the least of which include:

Find the right property

Acquire a real estate contract template

Submit the contract

Assign the contract

Collect the fee

1. Find The Right Property

You need to prune your leads, whether from newspaper ads, online marketing, or direct mail marketing. Remember, you aren’t just looking for any seller: you need a motivated seller who will sell their property at a price that works with your investing strategy.

The difference between a regular seller and a motivated seller is the latter’s sense of urgency. A motivated seller wants their property sold now. Pick a seller who wants to be rid of their property in the quickest time possible. It could be because they’re moving out of state, or they want to buy another house in a different area ASAP. Or, they don’t want to live in that house anymore for personal reasons. The key is to know their motivation for selling and determine if that intent is enough to sell immediately.

With a better idea of who to buy from, wholesalers will have an easier time exercising one of several marketing strategies:

Direct Mail

Real Estate Meetings

Local Marketing

2. Acquire A Real Estate Contract Template

Real estate assignment contract templates are readily available online. Although it’s tempting to go the DIY route, it’s generally advisable to let a lawyer see it first. This way, you will have the comfort of knowing you are doing it right, and that you have counsel in case of any legal problems along the way.

One of the things proper wholesale real estate contracts add is the phrase “and/or assigns” next to your name. This clause will give you the authority to sell the property or assign the property to another buyer.

You do need to disclose this to the seller and explain the clause if needed. Assure them that they will still get the amount you both agreed upon, but it gives you deal flexibility down the road.

3. Submit The Contract

Depending on your state’s laws, you need to submit your real estate assignment contract to a title company, or a closing attorney, for a title search. These are independent parties that look into the history of a property, seeing that there are no liens attached to the title. They then sign off on the validity of the contract.

4. Assign The Contract

Finding your buyer, similar to finding a seller, requires proper segmentation. When searching for buyers, investors should exercise several avenues, including online marketing, listing websites, or networking groups. In the real estate industry, this process is called building a buyer’s list, and it is a crucial step to finding success in assigning contracts.

Once you have found a buyer (hopefully from your ever-growing buyer’s list), ensure your contract includes language that covers earnest money to be paid upfront. This grants you protection against a possible breach of contract. This also assures you that you will profit, whether the transaction closes or not, as earnest money is non-refundable. How much it is depends on you, as long as it is properly justified.

5. Collect The Fee

Your profit from a deal of this kind comes from both your assignment fee, as well as the difference between the agreed-upon value and how much you sell it to the buyer. If you and the seller decide you will buy the property for $75,000 and sell it for $80,000 to the buyer, you profit $5,000. The deal is closed once the buyer pays the full $80,000.

Assignment of Contract Pros

For many investors, the most attractive benefit of an assignment of contract is the ability to profit without ever purchasing a property. This is often what attracts people to start wholesaling, as it allows many to learn the ropes of real estate with relatively low stakes. An assignment fee can either be determined as a percentage of the purchase price or as a set amount determined by the wholesaler. A standard fee is around $5,000 per contract.

The profit potential is not the only positive associated with an assignment of contract. Investors also benefit from not being added to the title chain, which can greatly reduce the costs and timeline associated with a deal. This benefit can even transfer to the seller and end buyer, as they get to avoid paying a real estate agent fee by opting for an assignment of contract. Compared to a double close (another popular wholesaling strategy), investors can avoid two sets of closing costs. All of these pros can positively impact an investor’s bottom line, making this a highly desirable exit strategy.

Assignment of Contract Cons

Although there are numerous perks to an assignment of contract, there are a few downsides to be aware of before searching for your first wholesale deal. Namely, working with buyers and sellers who may not be familiar with wholesaling can be challenging. Investors need to be prepared to familiarize newcomers with the process and be ready to answer any questions. Occasionally, sellers will purposely not accept an assignment of contract situation. Investors should occasionally expect this, as to not get discouraged.

Another obstacle wholesalers may face when working with an assignment of contract is in cases where the end buyer wants to back out. This can happen if the buyer is not comfortable paying the assignment fee, or if they don’t have owner’s rights until the contract is fully assigned. The best way to protect yourself from situations like this is to form a reliable buyer’s list and be upfront with all of the information. It is always recommended to develop a solid contract as well.

Know that not all properties can be wholesaled, for example HUD houses. In these cases, there are often anti-assigned clauses preventing wholesalers from getting involved. Make sure you know how to identify these properties so you don’t waste your time. Keep in mind that while there are cons to this real estate exit strategy, the right preparation can help investors avoid any big challenges.

Assignment of Contract Template

If you decide to pursue a career wholesaling real estate, then you’ll want the tools that will make your life as easy as possible. The good news is that there are plenty of real estate tools and templates at your disposal so that you don’t have to reinvent the wheel! For instance, here is an assignment of contract template that you can use when you strike your first deal.

As with any part of the real estate investing trade, no single aspect will lead to success. However, understanding how a real estate assignment of contract works is vital for this business. When you comprehend the many layers of how contracts are assigned—and how wholesaling works from beginning to end—you’ll be a more informed, educated, and successful investor.

Click the banner below to take a 90-minute online training class and get started learning how to invest in today’s real estate market!

What is an STR in Real Estate?

Wholetailing: a guide for real estate investors, what is chain of title in real estate investing, what is a real estate fund of funds (fof), reits vs real estate: which is the better investment, multi-family vs. single-family property investments: a comprehensive guide.

Interested in buying or selling an assignment property? These are the six steps to an assignment sale.

Introduction

Are you considering buying or selling a property through an assignment sale? If so, it's important to understand the process and how it differs from a traditional real estate transaction. In this blog post, we will explain the steps involved in an assignment sale, from the initial agreement to the closing of the transaction. Whether you're a potential buyer or seller, this guide will help you understand the ins and outs of the assignment process and make informed decisions about your real estate investment.

Six Steps of an Assignment Sale

• The original buyer enters into a contract to purchase a property.
• The original buyer is interested in selling the contract or is unable to fulfill the terms of the contract, such as making the required down payment or obtaining financing. The original buyer can then list the property on manorAssign.com for maximum exposure.
• Potential buyers (to-be assignees) place offers for the relevant property.
• The assignee negotiates the terms of the contract with the original buyer (seller) and arranges for the necessary financing.
• Once the deal is closed, the assignee assumes all of the rights and obligations of the original contract, including the obligation to complete the purchase of the property.
• The assignee completes the purchase of the property, either at the closing date specified in the original contract or at a later date agreed upon by the parties.

If you're interested in exploring the possibilities of an assignment sale, contact our brokerage, Manorlead, today. Our team has extensive experience and expertise in the assignment process, and we can help you navigate the complexities of the transaction to ensure a successful outcome. Don't miss out on the potential benefits of an assignment sale – contact us now to learn more!

Richard Xie

Stay up to date with our newest collections, latest deals and special offers! We announce new collection every three weeks so be sure to stay in touch to catch the hottest pieces for you.

• Login / Register
• (778) 909-1305
• Professional Advice

What Is an Assignment Sale? Understanding the Ins and Outs of This Real Estate Process

An assignment sale occurs when the original buyer of a property (the assignor) transfers their rights and obligations of the property contract to another buyer (the assignee) before the official closing of the sale.

This process allows the assignee to step into the original purchaser's shoes, taking on the commitments of the property purchase, which could be a pre-construction condo, house, or any other form of real estate.

Now, let's delve deeper into understanding how assignment sales work, their intricacies, and what they mean for buyers and sellers in the real estate market.

Demystifying the Elements of an Assignment Sale

Embarking on a real estate journey often introduces many terms and processes that may seem complex at first glance, with 'assignment sales' leading the pack in complexity and confusion.

Whether you're the original buyer looking to navigate away from closing costs or a savvy purchaser hunting for a valuable investment, understanding the nuts and bolts of assignment sales is an invaluable asset in the dynamic landscape of real estate.

How Assignment Sales Work

Assignment sales introduce a unique dynamic in real estate transactions, particularly in bustling markets like Vancouver Island and the Sunshine Coast .

When you buy a pre-construction unit, the property is yours, albeit not immediately ready for occupation. Life changes or financial circumstances sometimes evolve between the original purchase agreement and the final closing, necessitating a shift in plan.

Here's where assignment sales come into play. The original buyer can sell their interest in the property before the final sale, sidestepping typical hurdles like mortgage payments or land transfer taxes that come with a regular sale. This method provides a strategic avenue for purchasers to hand over their contractual obligations to another party without waiting for the property's completion.

The Assignment Clause: A Vital Cog in the Wheel

The assignment clause in the original contract is central to these types of transactions. This clause allows the transfer of the buyer's rights and responsibilities to another person.

It's crucial to understand that not all pre-construction sales agreements have an assignment clause, and most builders or developers might impose restrictions or require consent before any assignment deal can proceed.

Understanding the Financials: Costs and Fees

Engaging in assignment sales tends to involve several costs that both the buyer and seller must anticipate.

These include the assignment fee charged by the developer, legal fees for contract transfer, and possibly higher legal fees due to the complexity compared to a resale property. There could also be tax implications depending on the nature of the transaction and the parties involved.

Navigating Through the Interim Occupancy Period

A common scenario in assignment sales, especially in pre-construction condos, is dealing with the interim occupancy period.

This period arises when the assignee can take possession (though not ownership) of the unit while the property is not officially registered. During this phase, the assignee pays occupancy fees, akin to rent, which don't go towards mortgage payments.

Understanding this period helps both parties make an informed decision and prepare for the financial responsibilities it entails.

The Pros and Cons of Assignment Sales

Navigating assignment sales requires a balanced understanding of its advantages and drawbacks. While these transactions open avenues for lucrative deals and flexible arrangements, they also carry inherent risks and complexities that can impact buyers and sellers.

This exploration will provide clear insights, aiding your decision-making in the vibrant real estate market.

The Bright Side: Benefits of Assignment Sales

• Less Competition, More Opportunities: One advantage that makes assignment sales attractive, particularly in areas prone to bidding wars like Vancouver Island , is less competition. Fewer buyers are willing or informed about engaging in this kind of sales transaction, reducing the frenzy often seen in hot real estate markets. This situation can present a more favourable buying environment for those ready and willing to proceed with an assignment purchase.
• Potential for a Better Deal: For buyers, assignment sales sometimes offer the opportunity to get into a brand-new unit at a potentially lower cost. Since the assignee is stepping into an existing agreement, they might benefit from the original purchase price, which could be lower than current market rates, especially in fast-growing communities.
• Flexibility for the Original Buyer: For the original buyer, an assignment sale offers a way out, potentially recouping the deposit paid and avoiding financial penalties that might come with breaking a purchase agreement. This strategy can be particularly advantageous if the purchaser's circumstances change and needs to free up cash or avoid taking on a mortgage.

The Flip Side: Challenges and Risks of Assignment Sales

• Complexity and Higher Legal Fees: Assignment sales are not your straightforward real estate transaction. They require additional steps, such as securing the developer's consent, and the legal process is more complex than purchasing resale properties. As a result, both parties might incur higher legal fees to facilitate the transaction.
• Financial Overheads and Closing Costs: For the assignee, the initial cost outlay can be substantial for the assignee. They must reimburse the original buyer's deposit, pay the assignment fee, cover land transfer taxes, and prepare for other closing costs. These expenses require careful consideration and financial planning.
• Uncertainties and Marketing Restrictions: In some cases, developers impose marketing restrictions, making it challenging to advertise the assignment sale. Additionally, the assignee, now the new buyer, takes on certain risks like development charges or changes in market conditions, which could affect the property's value upon final closing.

Making the Move: Deciding If an Assignment Sale Is Right for You

Deciding to engage in an assignment sale is a pivotal moment, requiring a blend of financial foresight and market understanding.

As we delve into this decision-making process, we'll consider critical personal and economic factors that ensure you're making a choice that aligns with your real estate ambitions and lifestyle aspirations.

Conduct Due Diligence: Know What You're Getting Into

Involving real estate agents experienced in assignment sales is a prudent step for guidance through the intricacies of these transactions.

Also, consulting with a real estate lawyer ensures you understand the legalities, your rights, and any potential liabilities you might be assuming.

Consider Your Financial Standing and Long-Term Goals

Reflect on your current financial health and future plans.

For original buyers, if life changes dictate a change in your real estate investments, an assignment sale could be a viable exit. For potential assignees, consider whether this buying pathway aligns with your investment strategy and if you're comfortable with the associated risks.

Stay Informed About Market Conditions

Market dynamics greatly influence real estate valuations. A clear picture of current trends, especially in your buying area (like Fort St John or cities in the Okanagan ), helps make an informed decision.

Understanding these trends could offer insights into whether you're setting yourself up for a profitable investment or a potential financial misstep.

Bringing It All Home with LoyalHomes.ca

Navigating the world of assignment sales can be a complex journey, laden with opportunities and pitfalls. Whether you're considering selling your contractual rights or stepping into an existing purchase agreement, the route is layered with legal, financial, and market considerations.

At Loyal Homes, we understand that your real estate journey is more than just a transaction; it's a pivotal chapter in your life story. We're here to guide you through each step, ensuring you're equipped with the local, accurate, and relevant information to make decisions confidently. Our team is committed to providing a service that stands a notch above the rest, focusing on relationships and community at its core.

Ready to take the next step in your real estate adventure in British Columbia? Whether it's finding the perfect neighbourhood, exploring investment opportunities, or seeking your dream home, we're here to assist.

For a personalized experience tailored to your unique needs, consider our Personalized Home Search . If you're on the selling side and need to understand your property's current market standing, request a Free Home Valuation . Or, for any other inquiries or guidance, feel free to contact us . Your journey to a successful real estate experience in British Columbia starts with LoyalHomes.ca, where your peace of mind is our highest priority.

Frequently Asked Questions

Is it good to buy an assignment sale.

Buying an assignment sale can be advantageous, offering lower purchase prices compared to current market rates for similar properties, especially in hot real estate markets. However, this venture also requires thorough due diligence to ensure that the agreement terms, property details, and financial implications align with your investment goals.

Can You Make Money on an Assignment Sale?

Yes, there is a potential to make money on an assignment sale, particularly if the property's value has increased since the original purchase date. This profit occurs due to appreciation over the period, especially in high-demand areas, but it's crucial to factor in any assignment fees, legal costs, and tax implications to understand the net gainfully.

What Are the Risks of Buying an Assignment Sale?

The risks include a lack of guarantees on the final product as specifications might change, potential delays in construction, and complexities in financing, often requiring a more substantial initial deposit. These elements underscore the importance of legal counsel to navigate contract specifics and to prepare for any contingencies or additional costs.

How Do I Sell My Pre-Construction Assignment?

Selling a pre-construction assignment involves marketing to potential buyers, typically requiring the developer's consent and possibly entailing a fee. Engaging with a real estate professional who understands the local market nuances and legalities of assignment sales is essential to ensure a smooth, compliant transaction.

Do I Pay Tax on Assignment Sale?

Tax implications on assignment sales can be multifaceted, potentially involving income tax on profits and GST/HST on the purchase, depending on factors like the property type and the seller's tax status. It's advisable to consult with a tax professional to accurately determine specific obligations and strategize for tax efficiency based on your circumstances.

What Is the Difference Between a Transfer and an Assignment?

A transfer and an assignment differ significantly; a transfer involves changing property ownership after a project's completion, whereas an assignment sells one's interest in a property before it's finished. Understanding this distinction is crucial as it affects the contractual obligations, rights transferred to the new buyer, and the legal and financial processes involved in the transaction.

• Photo: @ irina88w via Canva.com
• Photo: @ AndreyPopov via Canva.com
• Photo: @ putilich via Canva.com

Post a Comment

Related posts.

Unlocking the Potential of a Vendor Take-Back Mortgage: How Seller Financing Works

Vendor Take Back Mortgages (VTB) offers an innovative financing solution that can be a game-changer for buyers and sellers in the real estate market.... Read More

Mortgage Broker or Bank: Navigating Your Best Path in Home Financing

Choosing between a mortgage broker and a bank for your home financing needs is a crucial decision. Whether you're eyeing the vibrant real estate ... Read More

Complexities of a Lien on the House: A Comprehensive Guide

Navigating the complex world of property liens can be daunting. Liens on a house represent a legal claim against a property, often resulting from ... Read More

We're Here to Help

• X (Twitter)

Have a Question or Want a Free Market Report?

• Advanced Search
• Search by Map
• Property Tracker
• Featured Listings
• Vancouver Island Communities
• Lower Mainland Communities
• Sunshine Coast Communities
• Thompson Okanagan Communities
• Kootenay Rockies Communities
• Cariboo Communities
• Northern BC Communities
• Mortgage Calculator
• Mortgage Pre-Approval
• First Time Buyers
• Making an Offer
• What Are Closing Costs?
• Financial Terms Glossary
• Personalized Home Search
• Factors to Consider When Moving to a New City
• Selling a Home
• Pricing Your Home
• Marketing Your Home
• Showing Your Home
• Adding Value
• Free Market Analysis
• Join Our Group

Get started

Selling Real Estate

Mar 20, 2024

Everything You Need to Know About an Assignment Sale self.__wrap_b=(t,n,e)=>{e=e||document.querySelector(`[data-br="${t}"]`);let s=e.parentElement,r=B=>e.style.maxWidth=B+"px";e.style.maxWidth="";let o=s.clientWidth,u=s.clientHeight,a=o/2-.25,c=o+.5,p;if(o){for(r(a),a=Math.max(e.scrollWidth,a);a+1 {self.__wrap_b(0,+e.dataset.brr,e)})).observe(s):process.env.NODE_ENV==="development"&&console.warn("The browser you are using does not support the ResizeObserver API. Please consider add polyfill for this API to avoid potential layout shifts or upgrade your browser. Read more: https://github.com/shuding/react-wrap-balancer#browser-support-information"))};self.__wrap_b(":R1aijl6:",0.75)

6 minute read

In real estate, there are a number of different types of transactions that come with their own unique benefits and challenges. People are most familiar with a standard purchase or sale of a home that already exists (ie. a resale property). However, the exchange is quite different when someone decides to buy a pre-construction home (typically from a builder) that hasn’t been lived in. A further nuance is an assignment sale, which can occur in both the resale and pre-construction space.

With all that said, assignment sales aren’t widely understood and can often be confusing for those venturing into them. That’s why we put together this comprehensive guide on assignment sales in Ontario! If you find yourself reading this, it's likely you're seeking a deeper understanding of what assignment sales are, their significance, and how they can impact both buyers and sellers. In this blog, we aim to answer all your questions about assignment sales and their nuances. 

Understanding Assignment Sales

First things first, what exactly is an assignment sale? It's like passing the baton in a relay race before the finish line. In real estate, this means the original buyer (assignor) transfers their rights to buy a property to someone else (assignee) before they officially own it. The transfer allows the assignee to take over the assignors rights and obligations outlined in the Agreement of Purchase & Sale (APS). Assignments usually happen in pre-construction projects but can occur in other types of property transactions too. Put simply, an assignment enables the buyer of a home to sell the home before they take ownership of it. 

Why Assignment Sales Happen

Assignment sales can take place for a whole suite of reasons, but typically they occur when the buyer's personal circumstances have changed. This could be related to their financial circumstances, lifestyle changes, work relocation, etc. Especially when it comes to pre-construction, a commitment to purchase typically happens well in advance of the move in date. This leaves a lot of time for things to change for the buyer, potentially requiring them to exit the deal before the closing date. An assignment presents them with a great way to transfer responsibility of the APS to another individual, without having to incur the penalties that might come with trying to back out of the purchase altogether. 

For an assignee, an assignment can be an attractive way to purchase a property. They may be able to take advantage of a drop in value of the property since the assignors purchase or they may have just missed the opportunity to buy the property in the first place. Either way, an assignment provides them the right to purchase a property in a way that is beneficial to them.  

The Process of an Assignment Sale

Imagine you've agreed to buy a brand-new condo that's still under construction. Unfortunately, sometimes life just happens, and you decide not to go through with the purchase. Enter the assignment sale. Here's how it unfolds:

Original agreement: You've signed on the dotted line to purchase the condo.

Change of heart: For whatever reason, you opt not to finalize the purchase.

Finding a new buyer: You find someone who wants to take over your agreement.

Sealing the deal: You both sign an assignment agreement, transferring your purchasing rights to them.

Closing time: The new buyer finalizes everything with the developer.

This process might sound straightforward, but it's laden with legal, financial, and contractual nuances that need careful navigation. This is why it’s essential you engage a real estate lawyer as soon as possible in the process. They’ll be able to advise you on your legal rights and obligations that come with an assignment. 

Advantages of Assignment Sales

So, why consider an assignment sale? For sellers, it's a graceful exit from a property purchase, possibly with a profit if the property's value has increased. Buyers, on the other hand, can snag properties in developments that are no longer on the market or have appreciated in value since their initial sale.

Challenges and Considerations

But it's not all rainbows and butterflies. Assignment sales come with their own set of challenges. There are legal hoops to jump through, financial implications such as taxes and fees, and the ever-present risk of deals not going as planned. This is a legally binding contract so both parties need to do their due diligence and, most importantly, seek professional advice. This includes advice from a real estate agent, real estate lawyer, and a tax professional. While that all might sound expensive, not getting the right advice before committing to an assignment could turn out to be much more costly. 

There have also unfortunately been some bad actors in the assignment space in the past. The good news is that regulators have stepped in to provide better oversight in the space in order to protect consumer, but no regulator is perfect. This just emphasizes the importance of engaging multiple professionals in your assignment, to ensure that you’re getting unbiased and valuable advice.

Navigating the Market

The assignment sales market is a vibrant and ever-changing landscape, heavily influenced by geographic nuances and existing market conditions. This variability means that opportunities for assignment sales can differ significantly from one region to another, often reflecting the local demand for real estate, economic stability, and the pace of new development projects. For individuals keen on exploring assignment sales, whether as potential buyers or sellers, understanding these regional market dynamics is essential.

One effective strategy for identifying great assignment sale opportunities involves monitoring developments that have reached their sales capacity. Sold-out projects often indicate a high demand for properties within a particular area or development, making assignments from these projects particularly appealing to those looking to enter or invest in these sought-after locales.

Not to keep harping on the need for guidance and expertise when navigating the world of assignments, but I’m going to! The specialized nature of assignment sales requires real estate professionals who possess a deep understanding and experience in this specific segment of the market. Real estate agents who specialize in assignment sales can offer invaluable insights, facilitate connections between buyers and sellers, and navigate the complex regulatory and contractual landscape associated with these transactions.

Assessing the value and potential of an assignment sale requires a comprehensive approach. Potential buyers should conduct thorough due diligence, including reviewing the original purchase terms, understanding any restrictions or conditions imposed by developers, and analyzing current market trends to gauge the property's potential for appreciation. For sellers, determining the right price point and understanding the best timing to enter the market are crucial steps in maximizing returns on their investment.

Wrapping Up

And there you have it—a comprehensive guide to navigating the waters of assignment sales. Whether you're looking to buy or sell, understanding the ins and outs of these transactions can make all the difference. So, consult with professionals, do your due diligence, and who knows? Your next real estate adventure might just be an assignment sale.

At Doormat , we have experienced real estate lawyers that can help you navigate the tricky world of assignments. We can also support you with your standard property purchases, sales, refinances, ownership changes, and status certificate reviews. If you have any questions, reach out !

Co-founder and COO

Related blog posts

Mar 1, 2024

Understanding the SC Escape Clause in Real Estate Transactions

Navigating the world of real estate transactions can feel like deciphering an ancient script. The process isn't entirely straightforward and there are a ton of clauses and terms that can be long-winded and unclear. Among the many clauses and terms, the Seller's Concession (SC) Escape Clause stands out as a noteworthy mention. As both a buyer and a seller, it’s an important clause to understand, so we break it down in this blog.

Buying Real Estate

Mar 8, 2024

Navigating the Waters of Canada's Anti-Flipping Tax: What You Need to Know

Welcome to our deep dive into one of the hottest topics in Canadian real estate: the anti-flipping tax. As housing markets across the country continue to evolve, the federal government introduced this tax measure in the 2022 budget and it came into effect as of January 1, 2023. The aim of the tax is to cool down speculative real estate transactions in order to help address ongoing housing affordability concerns. Whether you're a seasoned investor or considering your first property venture, understanding the ins and outs of this tax is crucial. Let’s unpack what it means for you.

Feb 16, 2024

Why You Shouldn't Do Same Day Property Closings

The idea of closing on your property sale and immediately purchasing a new home on the same day can seem like a streamlined, efficient approach. At first glance, it sounds like a seamless transition from one home to another without the hassle of temporary housing and/or bridge financing. The problem is, this strategy is filled with complexities, risks, and unexpected challenges that can turn what seems like a convenient solution into a stressful experience. 

You are using an outdated browser. Please upgrade your browser to improve your experience.

How Do Assignment Sales Work

Share this:, june 25, 2021 | uncategorized.

Although assignment sales are not the most common type of real estate transaction, they do happen relatively often. They are especially common in cities with a lot of new developments, like Etobicoke . Assignment sales have many benefits for both buyers and sellers.

Although they can sometimes be complex, working with an experienced agent is the best way to ensure an assignment sales goes smoothly.

Since these transactions are more complex than a traditional real estate sale, we run into many client questions about assignment sales and how they work.

Here’s a guide to everything you need to know about assignment sales.

What is an assignment sale.

An assignment sale is when the original buyer of a home sells their property before closing on it.

When would this ever happen? In the world of pre-construction real estate, many new development homes are bought up before they even physically exist. For example, in many new condo building developments, the construction doesn’t even break ground until about 70% of the units are already sold.

There are many different roles in this type of assignment sale including the developer, assignor, and assignee. Let’s break down each role:

Who Is The Developer?

When it comes to pre-construction real estate projects, developers pretty much run the show. From identifying the site of new developments and brokering financing deals, to hiring the architects and builders to oversee the entire process, developers are the masterminds behind every new construction project. They often play an important role in an assignment sale.

Who Is The Assignor?

The assignor is the original buyer of the pre-construction property . The ‘assignor’ could be an individual or a business entity. For example, a real estate investment company, a private investor, or a regular home buyer. Pre-construction real estate developments usually attract a lot of interest from a diverse cast of buyers—even if the properties aren’t move-in ready.

It might be hard to consider buying a home that doesn’t actually exist yet. You’re basically buying an idea. However, there are advantages of ‘getting in early.” Some of the biggest benefits of buying pre-construction include:

• Price : Pre-construction units usually cost less. There are greater risks involved and the units haven’t changed hands through re-sale yet.
• Appreciation : The unit may increase in value between the time it’s purchased to when it’s move-in ready through normal market growth.

Who Is The Assignee?

If an assignor wants to sell their interest (read: ownership) of their property unit before construction is complete, this would result in an assignment sale. The assignee is the new buyer of the assignor’s property. This is the person who will ultimately take the sale the whole way through to closing.

Do Assignment Sales Benefit Buyers or Sellers?

Assignment sales can be beneficial for both parties in a real estate transaction. Although the assignor takes on some risk in buying before the project breaks ground, they reap other benefits. For example, if the value of the property goes up in the interim, they can usually sell it for more than they paid.

For an assignee, they might spend a little more than the original price, but they are taking on less risk while still moving into a brand-new home.

Why Do Assignment Sales Happen?

An assignor might sell their property to an assignee for many reasons.

Their plans might have changed for one reason or another, making them unable to move into their pre-construction property. Or, they may feel it’s the right time to cash in on their investment should the value of their property have increased.

Whether you’re interested in learning more about assignment sales or just need some general advice about buying real estate, our team is here to help you. Book your personal home buying consultation here , or simply contact us here to get started.

Search By Keyword

Search by category, popular posts.

• 5 Top-Notch Mississauga Schools
• How To Choose the Right Etobicoke Real Estate Agents
• Everything You Need to Know About Kipling Station Condos in Etobicoke
• 5 Incredible Mississauga Communities to Call Home

Related Posts

Living in long branch: an up-and-coming etobicoke neighbourhood.

• Industry Partners
• Limited Partners
• Entrepreneurs
• Corporations

Understanding Challenges in the Assignment Sales Process

In the article below, Lovish Gupta, Head of Research at R-LABS, takes a comprehensive look at the assignment sale transaction process and highlights key areas for innovative solutions.

Over the past few years, population growth and housing demand in the Toronto market has led to an increase of pre-construction condo projects, and as a result, assignment sales have become a much more common practice.

While many investors and industry professionals are familiar with assignment sales, the influx of public interest has highlighted a number of pain points in the process. Many people are unaware of the tight timelines, marketing challenges and onus that come with an assignment sale. It’s a problem that we’re trying to solve in the Lab but first, we need to find clarity around the problem.

What is an Assignment Sale?

An assignment sale is a type of new condominium sale which occurs between the original buyer, the Assignor, and a new buyer, the Assignee. The Assignor purchases a unit from the condo developer with the intention of selling before the project closes. From there, the Assignor works with a broker to market the unit to potential Assignees.

After reviewing offers from the potential Assignees, the Assignor will select their desired offer and go to the developer for approval. If the developer approves the assignment sale, the Assignor sells their interest, also known as their Agreement of Purchase and Sale (APS), in a preconstruction property and the Assignee becomes the new owner of the unit.

There are many reasons why an Assignor may choose to sell on assignment: perhaps they are an investor looking to profit from price appreciation, they may have experienced a change in lifestyle (e.g. having children, new job, etc.), or they are no longer able to close. On the other side, Assignees may choose to buy on assignment because they don’t have to wait as long for their unit to be built, or they are able to buy the unit at below market value.

Pain Points for Key Stakeholders

The current assignment sale process is complicated and difficult to navigate. Each assignment sale involves several stakeholders often working in silos. As a result, each stakeholder is faced with their own set of challenges in the assignment sale journey.

The biggest challenge for Assignors is the time and effort required to complete an assignment sale. Marketing restrictions and strict financing requirements for the Assignee can make it difficult for the Assignor to attract potential buyers. On top of that, each developer has a unique set of conditions for assignment sales (e.g., caps on development charges, common expense credits, and other incentives) and must approve all assignment sales before they are finalized. Should the sale not be approved, the Assignor not only loses the sale, but they also have an ongoing obligation with the developer to close on the unit.

When it comes to Assignees, the most common pain point is financing for the assignment sale. Assignment sales require a large amount of payment to be provided upfront in order to close the deal. This payment includes all deposits already made by the Assignor, plus the premium paid on the unit. In addition, the assignee needs to have clarity on existing builder conditions to original APS and has limited control on the previous decisions made by the Assignor (e.g. décor, upgrades)

For Brokers, there is usually a knowledge gap with assignment sales when compared to a real property sale – particularly around marketing. MLS restricts brokers from marketing assignment sales through their platform which can make it very difficult to find potential Assignees. While there are brokers who specialize in assignment sales, there is no standardized platform for marketing assignment sales. This makes it harder to convince clients to consider an assignment sale, determine market value, and set a transaction price.

Not only do assignment sales result in additional paperwork for the developer, but they are also unable to take part in the value increase of the property. Assignment sales may also lead to the devaluation of un-sold units if assignors sell for less than cost. In addition, the developer may deal with inquiries from the CRA due to income-reporting related questions.

Canada Revenue Agency (CRA)

Once the assignment sale is complete, the CRA has to account for incorrect income reporting by the Assignors. Currently, there is no central database to record assignment sale transactions in Ontario – making it difficult to track evaders without manually going through records of individual developers and buyers.

Assignments Around the World

What is see in Ontario’s housing market is echoed in many other parts of the world. From Vancouver to Dubai, here are some ways global cities are addressing the problems in the assignment sale process:

Vancouver, BC

In Vancouver, condo-flipping has led to increased real estate prices and income tax evasion on assignment sale profits. In an effort to regulate assignment sales transactions and cool the market, the BC government launched the Condo and Strata Assignment Register (CSAIR) on November 5 th , 2018.

CSAIR is a database that keeps track of buyers who have sold the units they have purchased, bringing transparency to the market and ensuring accurate income reporting. Since January 1, 2019, developers are responsible for collecting and reporting information on all assignments of purchase agreements. The database ensures that all assignors pay the applicable income tax, capital gains and property transfer tax.

In the early to mid-2000s, the rise in property flipping resulted in the property bubble burst and investors were left with over-priced properties. The Dubai Land Department (DLD) responded by partnering with the Real Estate Regulatory Authority (RERA) on a pre-construction management system called Oqood (meaning “contracts” in Arabic).

The Oqood portal provides a uniformed and centralized method for registering all types of contracts between developers and buyers, including assignment sale contracts. Once the pre-construction project receives a completion certificate, the information is passed through the portal and the property is seamlessly transferred to the Property Register at Dubai Land Department. Oqood is also a government-mandated program so failing to register the sale in the portal will result in a voided contract.

Improving the Assignment Sales Process in Ontario

The number of assignment sales continues to increase with the growth of the pre-construction condo market. Because of this, there is an urgent need to standardize the inefficient assignment sale process in the Ontario and beyond.

In the Lab, we’re exploring purpose-driven solutions that tackle multiple pain points in preconstruction sales. This may involve the creation of a centralized registry that brings transparency through tracking all assignment sales, or a transaction portal that ensures all stakeholders are communicating with each other rather than working in silos. Another possible solution may be introducing assignment financing options to help assignees close the deals. Ultimately, we see an opportunity to streamline the assignment sale process and bring transparency to the pre-construction condo market, bringing value to all stakeholders.

If you’re interested in improving the assignment sales process, reach out to [email protected] and learn how you get involved in our upcoming solution.

Share this post

Recent posts.

Green Real Estate

Unlocking Canada’s Hidden Real Estate Innovation Potential

Federation of Rental-housing Providers of Ontario (FRPO) Joins…

Residential Construction Council of Ontario (RESCON) Joins R-LABS’…

Pre-Construction Buying Guide

What is an assignment sale .

Kelechi Amadi

• January 31, 2024

Are you a first-time homebuyer in Canada exploring different ways to purchase a property? If so, you might have come across the term “assignment sale” and wondered what it means. Most real estate transactions in Canada are straightforward, except an assignment sale. However, it opens up new housing opportunities, which is worth the complexity. Let’s break down what an assignment sale is, how it works, and what you need to know as a buyer.

What is an Assignment Sale? 

An assignment sale occurs when the original buyer of a property also known as the assignor sells their rights to the purchase to another buyer also known as the assignee before the original transaction with the developer or builder is completed. In simple words, you’re not buying the property itself, but rather the contract to purchase the property .

A larger deposit 

Assignment sale buyers are required to put down 20% of the current price as deposit, which is equal to the amount the original buyer paid in instalments to the builder. Let’s understand with an example:

Buyer A purchased a pre-construction condo at $500,000 two years ago. Over the last two years, they paid 20% in deposit. Now, the condo’s price is $550,000, which means you’ll have to pay $27,500, which is 20% of the current price. 

Why Choose an Assignment Sale?

For buyers, assignment sales present an opportunity to acquire a property that is brand new and never previously occupied. Many of these properties feature extended closing periods, meaning you could anticipate a wait time ranging from six months to two years before you can move in. This means the property will be priced lower than current market rates. 

Sellers may choose to sell if their finances have changed, they make urgent relocation plans, or simply change their mind about the investment. 

Process of Buying An Assignment Sale

Assignment sales for pre-construction townhomes , semi-detached , and detached properties come by rarely. Work with an experienced realtor who can find you exclusive opportunities through their network. 

• Find an Assignment Sales 

Most assignment sales aren’t listed on traditional real estate platforms like MLS and Realtor.ca . They are posted on Facebook groups, brokerage websites, and sometimes shared among realtor-exclusive groups. 

• Understand how payment works 

The price you pay is based on the original purchase price agreed upon by the assignor and the developer and any extra amount the assignor charges based on regular market growth and desirability of the property and neighbourhood. That doesn’t mean there’s no room for negotiation. You can still negotiate but since these deals are quick in nature, you won’t have time for back and forth. 

• Consider the legalities 

As we mentioned before, assignment sales can be more complex legally and financially. It is important to work with a real estate lawyer who has experience in these transactions. They will walk you through the contract and make sure you are protected. 

• Approval from the developer

The property developer has to approve the assignment sale. Most have specific conditions or fees associated with the assignment process that both the assignor and assignee must agree to. 

• Closing the Deal

Like any real estate transaction, an assignment sale concludes at the closing, where the assignee becomes the official buyer of the property. Apart from the purchase price, you’ll also be responsible for closing costs, land transfer taxes, and any other fees outlined in the contract.

Are assignment sales worth it? 

If you missed purchasing a property during its pre-construction stage, you can still purchase it as an assignment. It might be listed at a higher price but it will still be worth more when completed. Since they are sold non-traditionally, you might be able to escape bidding wars and negotiate a fair price. You will also inherit builder incentives and benefits including decor dollars, 7-year long Tarion Warranty, and capped development charges. Considering all these advantages, if you have a good chunk of savings, assignment sales are worth all the trouble. 

If you are interested in buying assignment sales in GTA, our sales team is happy to help you. Please get in touch for a free consultation with our experienced team.

Share Now On:

Blog Categories

Table of contents.

How Does Pre-Construction Mortgage Work?

Mortgages for pre-construction projects work differently than traditional resale mortgages. You don’t need to get a mortgage until the project is complete and you receive

Why Pre-Construction Projects Outside Toronto Are A Better Investment?

As the real estate market in the GTA becomes increasingly challenging, turning to alternative locations like Barrie, St. Catharines, Hamilton, and Watertown might be a

Pre-Construction Condo Vs Stacked Townhouse: Which Is The Better Option?

When it comes to finding the perfect home, the options seem endless. If you are considering buying a home at its pre-construction phase, two popular

Dos And Don’ts To Pre-Construction Design Selections And Upgrades

Buying a pre-construction property might be a whole new experience for you. From choosing a unit to selecting decor, it is an exciting process but

Your trusted partner in simplifying pre-construction investments, empowering lives, and guiding you towards a brighter future in real estate.

Powered by:

Broker of Record

Real City Realty Inc.

Office Address

55 rutherford rd s #3, brampton, on l6w 3j3, canada, phone number, + 1 (416) 275-4408.

• Pre-construction
• First Home Buyer
• Our Process

Pre-Construction Projects

• Semi-Detached Houses
• Detached Houses

Latest Pre-Construction Projects

Q Condos - Kitchener, ON

Thompson Towers - Milton, ON

We are independent Realtors affiliated with Real City Realty Inc., Brokerage, specializing in pre-construction sales. We do not represent the builder. Leveraging our relationships with developers, we offer exclusive access to insider sales and true unit allocation ahead of general realtors and the public. Rest assured, your personal details will only be shared with Real City Realty Inc. Brokerage and may be used for future marketing purposes.

• Term of use
• Privacy Policy

• How It Works?
• frequently asked questions
• ASSIGNMENT SALE
• PRE CONSTRUCTION
• MORTGAGE BROKERS
• HOME EVALUATION
• PRIVATE LENDER
• 1 (416) 890-5604
• Create a Listing

Assignment Sale

An assignment sale in the pre-construction market.

A contract to buy a  pre-construction condo  suite is sold in an assignment sale, or it is “assigned,” to another party. Since the pre-construction condominium has not yet been registered, an assignment sale is typically used to prevent anyone from purchasing the actual unit. The contract itself cannot be sold.

You will receive an assignment clause or right in the form of a contract when you buy a pre-construction condominium unit. Before the condominium is even finished, you can decide to sell your assignment.

• No property is being purchased by Assignee/Buyer from Assignor – A third party is selling the assignee the “right” to purchase their property (usually a builder)
• In the Original Agreement with the Builder, Assignor transfers its rights and interests (or original seller)
• Assignee “assumes” and undertakes to carry out all of the Assignor’s responsibilities under the Initial Agreement as the Assignor’s interest in the original “deposit” is assigned by the Assignor to the Assignee.

The ownership will be given to the buyer once the building has been constructed and registered by the city. Until, it is merely the sale of a contract, but as you shall see, both the buyer and the seller benefit greatly from these deals.

Learn more about  assignment sales  in this article, including their uses, how they work, and how they may be transferred.

This will enable you to decide if an assignment sale is the best option for you. 

What Is An Assignment Sale? Why Do These Kinds Of Sales Happen?

Assignment sale is selling your unit’s rights before it is constructed. There are a variety of reasons why someone might sale an assignment. For instance, someone might have purchased a suite that won’t be finished for three years, but they recently had to move for work. To buy a home in their new city, the buyer might have to sell their contract.

Another typical explanation is that a buyer started the purchasing process while still single but got married or learned they were expecting a child during the  pre-construction   phase. They have recently learned that the one-bedroom pre-construction suite they purchased is insufficient for a growing family.

When this occurs, the “assignment clause” in the purchase agreement is essential. It enables the first purchaser to transfer the contract to another party without incurring financial penalties.

However, whether you are the buyer or the seller, it’s crucial to engage with both an experienced realtor and lawyer who know how to safeguard your interests. These types of transactions are popular and completely legal.

The developer, the assignor, and the assignee are all parties to these arrangements, which are more complicated than a typical resale. Interim occupancy and the final closing are both parts of the two-stage procedure.

An Example Of An Assignment Sale

A simple assignment agreement would only include this. Additional information is provided regarding the mortgage rules and other contract specifics. This is just an overview; each arrangement is distinct and has its own set of guidelines, terms, and conditions.

We suggest that anyone considering buying or selling a pre-construction assignment consult with a real estate agent,  real estate lawyer , and tax accountant. Making contact with a lawyer is crucial since assignors can be responsible for paying a sizable tax on any gains they obtained from the completed transaction.

A pre-construction condominium suite was purchased by John Smith from ABC Developments in 2017 for $400,000 with a total down payment of 20%, or $80,000. In 2022, the project is expected to be finished.

John learned that he would be transferred to a different city in 2021. He's holding onto his condo under construction since he can't afford to buy a new house.

Fortunately for John, the assignment clause permits him to sell his unit's contract before the building is finished and registered!

John has decided to sell his unit's contract to Jane Doe. He was able to sell the contract for $500,000 as a result of market changes. Assignment Purchase: Assignment Agreement: $500,000 Original Purchaser (Assignor) = John Smith New Purchaser (Assignee) = Jane Doe Vendor (Builder) = ABC Developments John Smith's assignment purchase price to Jane Doe is $180,000, which is due immediately. The deposit is $80,000, and the profit is $100,000. This payment's amount and timing are also negotiable.

Jane Doe will occupy the unit for the tenancy period beginning in 2022 when the building is finished and available for interim occupancy. She will now start paying the developer occupancy fees. Until the building can be registered, these fees serve as a substitute for condo and mortgage payments. When a property is declared safe to reside in by the city, interim occupancy occurs. After the municipality conducts a final inspection, the building will be legally registered. Jane Doe can stay in her suite until the building is formally registered.

Assignment Specifics: When the building is legally registered by the city, the developer and the new purchaser transfer official title. Finally, Jane Doe can sign a mortgage document and begin making mortgage and condo payments. Jane Doe's required funds to finalize the transaction to the builder = $320,000 As a current owner, Jane Doe is entitled to all property rights. Any resale of the property in the future will be treated like any other real estate deal.

Is It Worth It to Buy an Assignment?

Because fewer individuals seek out these types of transactions, assignment acquisitions can provide some of the finest discounts in the GTA condo market. In addition to having fewer purchasers, many real estate agents are unfamiliar with the assignment sale’s format and frequently choose not to market these listings. Even lawyers might not be familiar with all the details of an assignment sale.

Due to the high demand in the resale market, buyers may be forced into competitive bidding situations where they may overpay for their suite. When you purchase a contract through assignment, you have the chance to avoid intense competition and frequently pay significantly less than you would for a resale unit.

Both the buyer and the seller may benefit from the assignment condo market. The buyer can save time and possibly thousands of dollars by not having to wait for the building to be finished before listing their property.

Another benefit of purchasing an assignment agreement is that you will receive a brand-new unit that is already covered by the Tarion Warranty Program, which has a seven-year duration. Not to mention that you won’t have to wait the customary 3 to 4 years for the building to be finished and will probably be able to move into the unit sooner!

Here Are a Few Benefits For Buyers to Review:

• Options: When there aren’t enough listings on the market, there are more options.
• Less competition: These kinds of listings are looked at by fewer people.
• Peace of Mind: There is less of a chance for a bidding battle when fewer people are seeing these sales. Bidding wars and spending more money than you can afford only to outbid another buyer can be avoided.
• You Become A VIP: You are likely to inherit builder-provided VIP benefits like the seven-year Tarion Warranty Program and other benefits including credits, upgrades, developing cost caps, and more.
• More Choices: You could still be able to choose your own finishes, colors, and upgrades depending on how far along construction is.
• Negotiate: Sellers typically have to sell in order to release their equity. You may be able to negotiate prices, deposits, and closing dates with this.
• Brand-new Condo: Instead of waiting 2 to 3 years like in a traditional pre-construction contract, you will receive your unit much sooner. The occupancy date is frequently just a few months away.
• Taxes: Saving money on taxes like GST and HST may also be advantageous to you.

Selling an Assignment

In the past, owners who wanted to sell their pre-construction condos had to hold off on listing their condo for sale until the final closing date, which may take months or years. They might have already invested a sizable sum of money in closing costs and occupancy fees by this time.

Although assignment sales are not a new technique in Canada, when compared to other nations where condos have been around for far longer, the process is not always fully understood by sellers, buyers, agents, lawyers, and even lenders. By learning about assignments, sellers have been saving time and increasing their revenues, which has been rewarding.

The popularity of these transactions is rising. Consider it similar to condo flipping. In order to get their deposits back, sellers who transfer their property rights before or during interim occupancy can avoid incurring significant carrying and closing charges.

The majority of builders allow assignment sales, however they frequently have requirements that must be followed. There are still options open to you despite the strict rules in place.

Let’s Take a Look at the Advantages for Sellers:

• Re-invest: You can withdraw your equity and reinvest in other projects.
• No Carrying Costs: Paying monthly expenses, such as occupancy fees, which can occasionally extend up to two years, is avoidable.
• No Closing Costs: There is no requirement for you to obtain a mortgage or pay any other closing fees.
• Play The Market: Profit from the rising condo market by selling the unit before it is completed and investing the proceeds back into another project. It is a major contributor to Toronto’s economy and is still growing.

Assignments Frequently Asked Questions

It is the sale of a contract to buy a unit that is still under construction. In other words, the contract or right to purchase the property after it is finished is being sold, not a unit that has already been completed. The initial buyer of a property (the “assignor”) transfers their contractual duties to a subsequent buyer (the “assignee”). In general, the assignee will take on all of the assignor’s responsibilities, including paying taxes, interest, and maintenance fees while the property is in transitional occupancy. Upon completion, the assignee receives the real estate’s title and is responsible for paying all closing costs.

It is allowed unless expressly banned in the original buy and selling agreement. In some circumstances, the assignor may be charged a fee by the developer for this form of sale.

It depends. For more information, refer to your purchase agreement. Developers typically won’t allow an assignment sale without their consent, so you’ll need to speak with them and a lawyer. There have been incidents where an unauthorized assignment sale led to the cancellation of the initial agreement and the preservation of the deposit!

If you are looking for an assignment sale network or premium platform to display, locate and access assignment sales and assignable preconstruction projects, place them with confidence, effectiveness, privacy, and security, try Assign Circle. Contact us or check our assignment sale packages for more information. 

Compare listings

Reset Password

Please enter your username or email address. You will receive a link to create a new password via email.

• Sell your Home
• List your Rental
• Blog & Research
• Agent Experience
• Local Guides

Assignment Sales Explained

If you live in Downtown Toronto, you can attest to the fact that its skyline is scattered with cranes, its soundscape is mainly comprised of digging and drilling, and its road closures are abundant. Now that we've set the tone, the premise of this article is a byproduct of the emotion-inducing, 12-letter word: construction. In this article, we'll be diving deep into assignment sales; what they are, what makes them different, and the tips you need to know in order to smooth sail your way through the assignment sale process.

What is an assignment sale?

In order to understand what an assignment sale is, we'll need to touch on pre-construction properties. Buying a pre-construction property means that you purchase a property before it's ready, sometimes even before its construction has even begun. Building developers usually start pre-construction sales early on, meaning you can buy a condo in a coveted building and desirable area for a fairly reasonable price (sounds impossible, right?) - but here's the catch, it won't be ready for a couple of years. The upside is that it will most likely have appreciated in value by the time you receive it, making it a smart investment. As soon as you buy a pre-construction property, you are entering an agreement with the builder until the property is ready.

Now an assignment sale is when the original buyer of a pre-construction property sells their contractual interest in the property to a new buyer, meaning that they resell the pre-construction property before taking possession of it. The sale must be done before the original buyer takes registered possession of the home for it to be considered an assignment sale. As such, the second buyer (the purchaser of the assignment sale) is the one who completes the transaction with the original seller (the builder). To put it simply, it's basically a purchase of the agreement between the builder & the original buyer, so that the new buyer automatically becomes the new owner of the property once it's completed.

How do assignment sales work?

Since we've covered the assignment sale basics, let's get more technical - the property being sold is still not registered with the land registry office and is probably still under construction. This makes it quite different from a regular sale, in more than one way. Let's get into the main attributes that make this type of purchase unique.

A Larger Deposit

When purchasing a property via assignment sale, there is usually a larger than normal deposit. The deposit in an assignment sale takes into consideration the deposit paid by the original buyer to the builder (usually 20%), plus additional profit that the seller is hoping to gain. Since the original buyer (now the seller of the agreement) is making a profit on the property above the downpayment already paid,  these assignment sales can be very cash intensive - this is the single biggest deterrent for most buyers.

For instance, Buyer A purchases a pre-construction property from the developer of the project (the builder) for $500,000. Buyer A pays a 20% deposit ($100,000) over a two year span to the builder. Before the project is completed, Buyer A decides that they are no longer interested in going through with the purchase and would like to sell the unit, at this point (two years later) the market price of the property has now reached $550,000. Buyer A lists the unit for sale for $550,000, and the new buyer (Buyer B) would have to pay Buyer A their original deposit of $100,000 (20%), plus the property's appreciation of $50,000. The total deposit that Buyer B will have to pay is $150,000 which, at this point, would be higher than the 20% usually required to obtain a mortgage on an investment property.

Builder's Requirements & Consent

Another factor to keep in mind is that the assignment sale cannot take place without the builder's consent. If you're thinking of buying a pre-construction property only to then re-sell it as an assignment sale and turn a profit, this is definitely a factor worth considering. The builder reserves their right to hold back on consent for assignment sales and most only allow one assignment to be completed prior to final closing.

Therefore, as the buyer in an assignment sale, you'll only be able to take over the original purchase agreement between the builder and Buyer A with the consent from the builder. This usually entails the builder requiring mortgage approval documents, ID, and additional information from the new buyer. Then there would be an assignment agreement executed between the builder, original buyer, and you (the new buyer). Needless to say, this is not the case with a regular sale - in a regular sale, the only consent you will need is that of your own and the seller.

No Showings

Adding to the growing list of factors that make the assignment sale process different, showings do not exist here. Since, in most cases, an assignment sale is done before the building is even ready, the buyer is unable to physically see the property before purchasing it. As the buyer in an assignment sale, you'd be able to see floor plans, mock-ups, and images. In some cases, you'd also be able to head to the builder's sales center and see/touch the finishes (eg. kitchen cabinets, countertops, tiles, appliances, etc.). You may also see the status of construction of the building by visiting the development site, to get an idea regarding the stage of project.  

Since this requires a lot of trust, we recommend doing your research on the city's reputable builders & the neighbourhood of the development to make sure its the right for you. It's worth noting, however, that if the assignment sale is taking place during occupancy - when the original buyer has occupied the unit but is not yet in full possession of it - you might be able to see the unit in person.

Increased legal fees

Within the process of an assignment sale, you'll find that there is additional paperwork (Builder's consent, assignment agreement, etc.) and stages (occupancy closing, final closing, etc), which in turn leads to more legal hours. Lawyer fees for these types of sales are usually higher than a traditional sale because there are more contractual technicalities involving more than one party (Buyer A, the builder and Buyer B). Our advice would be to discuss these fees with your lawyer, in order to paint a more accurate picture of the what you can expect.

Occupancy Fees

When buying a property via assignment sale, you are essentially buying a pre-construction property through a third party (Buyer A). With pre-construction properties, you get physical possession of the home (known as occupancy) before you get full possession of the home on paper (known as final closing). Therefore, occupancy fees are fees that you have to pay from the time you get possession of the home (occupancy phase) until the time you take official title of the property (final closing). Final closing usually occurs after the building is completed and has reached a certain percent of total occupancy.  At final closing is when you would your mortgage would kick in. During the occupancy phase, you can expect the occupancy fees to be roughly the same amount as your mortgage payments would be with 20% down.

Additional Closing Costs (Levies)

To add to what seems like the never-ending fine print, you might come across a number of additional fees when it comes time for final closing. Most contracts with a builder state that the buyer might incur additional costs that will only be specified upon final closing. The main additional fees are levies charges, also known as development costs; these are costs that the builder incurred while constructing the building, which they pass on to you as the buyer.

The size of these fees really depends on more than one factor: the builder, the city, and the project are a few to list. However, in most cases, you may have the builder set an upper cap limit on these fees - also known as Capped Levies. That way you know that the additional charges will be have a maximum upper limit that they wont exceed. Typically in Toronto, most developers cap development charges for one bedrooms to $7,500, $15,000 for two bedrooms, and over $20,000 for three bedrooms but please keep in mind that these are just ballpark numbers and the exact capped amount varies.

It's essential to look at the original agreement between the assignment seller and the builder to see if levies are capped and at what amount. If the levies are not capped, you will have to assume the risk of higher-than-anticipated closing costs at the time of taking title to the property. Of course,  there are also the common costs associated with homeownership which include land transfer taxes, legal fees, and possible mortgage fees.

HST on Pre-construction

Last but not least, it's critical to consider HST (Harmonized Sales Tax) when buying via assignment sale, which essentially means you're purchasing a pre-construction property. As a buyer, the HST of 13% in most cases is actually already included in the purchase price of the pre-construction property and the builder then applies for their rebate. However, it's important to touch on the fact that buying a pre-construction property solely for investment may alter this structure.

If you are purchasing the property solely as an investor, and neither you or a direct family member will be occupying the unit, then you would have to pay the HST at final closing and apply for the New Residential Rental Property Rebate (NRRPR) after leasing the unit for one year. For more information regarding qualifications and the amount of the rebate, visit this publication from the CRA.

If you're purchasing the assignment for yourself and it will be used as a primary resident then you'll have to confirm that the HST is included in the purchase price of the assignment.  For more information you may also visit the CRA's info sheet here .

When it comes to HST and the status of your occupancy, you should always consult with your accountants and lawyers as each circumstance is unique.

Why do people purchase/sell on assignment?

Well, after much unbiased consideration, it's safe to say that purchasing/selling on assignment can be a win-win scenario for both parties - the assignment seller gets a price above purchase price and the buyer, in most cases, snags a property below market price. Since assignment sales tend to occur well into the construction phase, there's also less risk imposed on the buyer in an assignment sale. That being said, there are a number of reasons why a person might want or need to sell/buy a property on assignment:

Selling Reasons:

• Change of plans: since pre-construction homes can take years to be completed, the original buyer situation could have changed within that time. For example, the original buyer may have started a family and is now looking for a larger, more suitable home.
• Financial trouble: the financial situation of the original buyer may have changed over the years, and they're now put in a position to have to sell the property. For example, the original buyer may have lost their job, meaning they can't get qualified for a mortgage and are now unable to complete the purchase.
• Profit: it's very common for investors to buy pre-construction homes with the aim of re-selling them to turn a profit. This is usually a common scenario for assignment sales in the Toronto real estate market.

Buyer Reasons:

• Brand new building/area: it can simply be that the purchaser is looking for a property that has never been occupied, or is in a newly developed neighbourhood, or just wants to secure a property in a new, buzz-worthy development. An example of this is Nobu Toronto.
• Below market price and less competition: since these purchases require at least 20% down-payment, in most cases it could be that these units have less competition and can be purchased at somewhat of a bargain.
• Profit: again, investors also look to buy properties via assignment sale because they believe that the building or neighbourhood will continue to appreciate in value, and come time of total completion or a few years later they would be able to sell for higher.

Looking to buy a home in Toronto or the Greater Toronto Area (GTA)? Message us via the live chat on Dwelly.ca and start the conversation.

Subscribe to Dwelly Blog - Tips, trends & insights for home buyers, renters and sellers

Get the latest posts delivered right to your inbox

Stay up to date! Get all the latest & greatest posts delivered straight to your inbox

You are using an outdated browser. Please upgrade your browser to improve your experience.

Call or Text Us: 416.999.1240

[email protected]

What You Need to Know About Assignment Sales

• SHARE THIS:

What is an assignment sale? We get this question quite often from both investors and end-users when it comes to the Toronto condo market, especially with the dramatic rise in condo buildings and pre-construction sales. Assignment sales can be a great opportunity for everyone involved, from the seller to the buyer. But working with a seasoned real estate broker is one of the most important things you can do. An assignment sale isn’t a typical transaction and there are many things you need to know before moving forward.

What Does an Assignment Sale Mean?

An assignment is a sales transaction where the original buyer of a property (the “assignor”) allows another buyer (the “assignee”) to take over the buyer’s rights and obligations of the Agreement of Purchase and Sale, before the original buyer closes on the property (that is, where they take possession of the property). The assignee is the one who ultimately completes the deal with the seller. In other words, an assignment clause allows the buyer of a home to sell the place before they take possession of it. Although an assignment sale is possible for both home and condos, it’s much more popular among condo pre-construction buyers.

Why Would Someone Want to Sell Their Condo on Assignment?

With pre-construction condo purchases, the sale of suites typically takes place several years before the building is built. It’s a long time in between buying the suite and actually taking occupancy of it. And with this lag time comes life changes – a new job outside of the city or in a different province, a new family that’s expanding with children, etc. What worked for a particular buyer years ago may not be the current case at closing time.

Financial reasons is also another reason to sell on assignment. Perhaps the purchaser can no longer be able to close on the condo, or perhaps it’s an investor who bought pre-construction with no intention of closing on them, therefore using an assignment sale strategy to profit, based on quick appreciation in the area.

Often with pre-construction sales, there’s a long lag between when the original contract is entered into, when the Buyer can move in (the interim occupancy period) and the final closing. It’s not uncommon for a Buyer’s circumstances to change during that time…new job out of the city, new husband or wife, new set of twins, etc. What worked for a Buyer’s lifestyle 4 years ago doesn’t always work come closing time.

How Do Assignment Sales Work?

We completed an assignment sale for a client at 87 Peter Street which was a new building that has occupied, but not registered yet. Our client purchased a 1-bedroom, 1-bathroom condo pre-construction for $320,000.00. He was looking to sell the unit on assignment and listed it at $525,000.00. We received an offer of $500,000 which the seller was comfortable accepting.

Typically, when assignment sales takes place, the seller is looking for a buyer who can provide him with a purchase deposit that equals what he had to put down – usually 20% of the original purchase price. After providing the seller with this sum, the deposit paid to the builder now becomes the new purchasers deposit. Any upside to the seller can be paid based on the negotiated terms – sometimes when the seller gets a mortgage for the condo, or even earlier – it’s all based on terms of the assignment deal.

Overall, assignments sales are not to be overlooked – there can be some fantastic opportunities to get into a highly desirable building that you may have missed out on or purchase a condo that you may otherwise not have had access to. But the importance of working with a realtor and lawyer who know the ins and outs of these deals is the key to making them work for you.

If you’re interested in learning more about Assignment Sale and some of the great opportunities currently available, simply fill out the form below – we’ll get in touch right away.

• New Homes in Canada
• New Homes in Ontario
• New Homes in Toronto
• New Homes in York
• New Homes in Peel
• New Homes in Halton
• New Homes in Simcoe
• New Homes in Durham
• New Homes in Hamilton
• New Homes in Kawartha Lakes
• New Homes in Waterloo
• Cielo Condos
• One Delisle Condos
• Adagio Condos
• Express Condos
• LeftBank Condos
• Pearl Place Condos
• 75 James Condominiums
• Exchange District Condos 3
• Houses for Sale in Canada
• Houses for Sale in Ontario
• Houses for Sale in Toronto
• Houses for Sale in York
• Houses for Sale in Peel
• Houses for Sale in Simcoe
• Houses for Sale in Halton
• Houses for Sale in Niagara
• Houses for Sale in Durham
• Houses for Sale in Hamilton
• Houses for Sale in Waterloo
• Houses for Sale in Ottawa
• Condo Apartments in Toronto
• Condo Apartments in Durham
• Condo Apartments in Halton
• Condo Apartments in Hamilton
• Condo Apartments in Simcoe
• Condo Apartments in Wellington
• Condo Apartments in Peel
• Condo Apartments in York
• Condo Apartments in Dufferin
• Condo Apartments in Niagara
• Condo Apartments in Waterloo
• Condo Apartments in Ottawa
• Condo Townhouse in Toronto
• Condo Townhouse in Durham
• Condo Townhouse in Halton
• Condo Townhouse in Hamilton
• Condo Townhouse in Simcoe
• Condo Townhouse in Wellington
• Condo Townhouse in Peel
• Condo Townhouse in York
• Condo Townhouse in Dufferin
• Condo Townhouse in Niagara
• Condo Townhouse in Waterloo
• Condo Townhouse in Ottawa
• Townhouse in Durham
• Townhouse in Halton
• Townhouse in Hamilton
• Townhouse in Simcoe
• Townhouse in Wellington
• Townhouse in Peel
• Townhouse in York
• Townhouse in Dufferin
• Townhouse in Niagara
• Townhouse in Waterloo
• Townhouse in Ottawa
• Detached House in Toronto
• Detached House in Durham
• Detached House in Halton
• Detached House in Hamilton
• Detached House in Simcoe
• Detached House in Wellington
• Detached House in Peel
• Detached House in York
• Detached House in Dufferin
• Detached House in Niagara
• Detached House in Waterloo
• Detached House in Ottawa
• Semi Detached House in Toronto
• Semi Detached House in Durham
• Semi Detached House in Halton
• Semi Detached House in Hamilton
• Semi Detached House in Simcoe
• Semi Detached House in Wellington
• Semi Detached House in Peel
• Semi Detached House in York
• Semi Detached House in Dufferin
• Semi Detached House in Niagara
• Semi Detached House in Waterloo
• Semi Detached House in Ottawa
• Commercial Property in Toronto
• Commercial Property in Durham
• Commercial Property in Halton
• Commercial Property in Hamilton
• Commercial Property in Simcoe
• Commercial Property in Wellington
• Commercial Property in Peel
• Commercial Property in York
• Commercial Property in Dufferin
• Commercial Property in Niagara
• Commercial Property in Waterloo
• Commercial Property in Ottawa
• Office in Toronto
• Office in Durham
• Office in Halton
• Office in Hamilton
• Office in Simcoe
• Office in Wellington
• Office in Peel
• Office in York
• Office in Dufferin
• Office in Niagara
• Office in Waterloo
• Office in Ottawa
• Houses for Sale in Markham
• Houses for Sale in Vaughan
• Houses for Sale in Richmond Hill
• Houses for Sale in Mississauga
• Houses for Sale in Brampton
• Houses for Sale in Barrie
• Houses for Sale in Oakville
• Houses for Sale in Niagara Falls
• Houses for Sale in Ajax
• Houses for Sale in Kitchener
• Townhouse in Toronto
• Detached in Toronto
• Detached in Durham
• Detached in Halton
• Detached in Hamilton
• Detached in Simcoe
• Detached in Wellington
• Detached in Peel
• Detached in York
• Detached in Dufferin
• Detached in Niagara
• Detached in Waterloo
• Detached in Ottawa
• Semi Detached in Toronto
• Semi Detached in Durham
• Semi Detached in Halton
• Semi Detached in Hamilton
• Semi Detached in Simcoe
• Semi Detached in Wellington
• Semi Detached in Peel
• Semi Detached in York
• Semi Detached in Dufferin
• Semi Detached in Niagara
• Semi Detached in Waterloo
• Semi Detached in Ottawa
• Commercial in Toronto
• Commercial in Durham
• Commercial in Halton
• Commercial in Hamilton
• Commercial in Simcoe
• Commercial in Wellington
• Commercial in Peel
• Commercial in York
• Commercial in Dufferin
• Commercial in Niagara
• Commercial in Waterloo
• Commercial in Ottawa
• Houses for Rent in Markham
• Houses for Rent in Vaughan
• Houses for Rent in Richmond Hill
• Houses for Rent in Mississauga
• Houses for Rent in Brampton
• Houses for Rent in Barrie
• Houses for Rent in Oakville
• Houses for Rent in Niagara Falls
• Houses for Rent in Ajax
• Houses for Rent in Kitchener
• Guides Markham Weston Pickering Downtown Brampton Mississauga Vaughan Oakville Ajax Niagara Bowmanville
• Market Watch Markham Pickering Downtown Brampton Mississauga Oakville Niagara Bowmanville
• Calculator Mortgage Calculator CMHC Mortgage Insurance Calculator Land Transfer Tax Calculator Mortgage Amortization Calculator
• Blog Blog Home Real Estate Guide Real Estate News Real Estate Tips & Trends Canada Guide Canada Tourism Fintech Lifestyle Job & Work Culture Home Decor & Renovation Banking
• Knowlege Center Toronto Peel York Durham
• Sell Your Home
• Post Property
• How to Apply For Philippine Passport Renewal
• How to Become a Canadian Citizen
• Guide to Renew Canadian Visa Inside Canada
• Know Business Immigration to Canada
• Guide to Apply for Canada’s PR Visa
• How Can Social Media Jobs Improve Your Career?
• Work Space Tips for an Organized Office
• Tips for Starting a New Job in Canada
• Interview Questions to Get Jobs in Canada
• Highest Paying Jobs in Canada Without a Degree
• Tips for International Students to Study in Toronto
• Apply for Study Permit Extension in Canada
• Ways to Learn French Online in Canada
• Guide for International Students in Canada
• Best Courses For Highest Paying Jobs In Canada
• Impact of Climate Change on the Housing Market
• Ways to Keep Warm in Canada During the Winters
• Winter Wear in Canada
• Best Time to Visit Canada
• Guide For Your First Winter in Canada
• Everything About Nexus Card in Canada
• Know About Canada’s Income Tax Law
• Why Queen Elizabeth is on Canadian Currency?
• Municipal Accommodation Tax in Canada
• Client Identification Requirements in Canadian Real Estate
• 12 Best Electric Vehicles in Canada
• Pros And Cons of Buying a Used Electric Car
• Car Maintenance Checklist in Canada
• Steps to Buy a Used Car in Canada
• Do’s and Don’ts of Buying a Vehicle Out of Province
• Miles to Kilometres (Miles to km)
• Ounces to Milliliters (oz to ml)
• Liters To Gallons (L to Gal)
• Square Meters to Square Feet
• Feet to Centimeters (Ft to Cm)
• Modern Mansions That Redefine House Goals
• Modern Lot House Plans Ideas in 2023
• Short Term Vs Long Term Rentals
• Guide For Buying Land in Ontario
• Housing Markets of Canada’s Major Cities
• Tips To Buy a Condominium in Canada
• Pros and Cons of Buying a Condo Apartment
• Consider before Buying a House with a Pool
• Pros and Cons Buying Rental Property
• Tips to Negotiate House Prices in Canada
• Calgary Tour Guide with Attractions and Travel Tips
• Hiking Essentials For Safe Journey
• Guide to Traveling Canada in Winter
• Steps to Plan Your Perfect Trip to Canada
• Tips for Moving During COVID-19 to Canada
• New Year Celebrations in Toronto 2023
• Things to do in Vancouver Art Gallery
• Best Things to Do in Toronto
• Things to Do at Niagara Falls Clifton Hill
• Rafting on the Ottawa River
• Explore Canadian Island Destinations
• Places To Spend Christmas in Canada
• Tourist Attractions in Stanley Park, BC
• Top Attractions in Canada’s Wonderland
• Inside The Science World in Vancouver
• Experience CN Tower Dining
• Choose a Toronto Vacation Rental for Next Holiday
• Budget Hostels and Hotels in Old Montreal
• Famous Terrace Restaurants in Quebec City
• Best Hotels in Toronto
• Celebrate Mothers Day in Canada 2023
• Celebrate Canada Day 2023
• Eid Al-Adha in Canada 2023
• Father’s Day 2023 in Canada
• About Canadian Hockey Game
• Best Credit Cards in Canada
• TFSA vs RRSP
• Apply for the Best Credit Card in Canada
• Manage Finance And Banking In Canada
• Open Student Bank Account in Canada
• Guide to Registering a Business in Ontario
• Choose Location for Business
• How to Start a Business in Canada
• Home Business Ideas in Canada
• Top Businesses for Immigrants in Canada
• Non-Resident Investment Account in Canada
• Real Estate Investment Handbook of Canada
• Benefits of Investing in the Real Estate Canada
• Financial Investment in Canada
• Financing Basics for First Time Home Buyers
• Housing Discrimination Under Fair Housing Act
• About Canada’s Income Tax Law
• Real Estate Tax Laws in Canada
• Employee Rights in Canadian Employment Law
• Laws of Driving in Canada
• Why Do You Need a Title Insurance?
• Empty Home Tax in Canada
• Trust Score vs Other Credit Scoring Systems
• Best Home Loan in Canada
• Non-Conforming Private Loan Institutions
• Best Alternatives to a Reverse Mortgage
• Different Types Of Loans In Canada
• Leonardo DiCaprio’s Breath-Taking Houses
• Guide To Prince Toronto Mansions
• Inside The Rapper Drake’s Manor in Toronto
• Robert Campeau House in Toronto
• Justin Bieber’s Houses And Mansions
• Affordable kitchen Organization ideas 2023
• Types of Basement Renovations
• Choose Between Grey and White Kitchen
• Ideas For Modernising House on Budget
• How To Compost in an Apartment?
• Canada’s Most Expensive Cities
• How Much Does it Cost To Raise a Child in Canada?
• The Cost of Living in Niagara
• The Cost of Living in Ottawa
• Pros and Cons of Living in Canada
• Smart Home Technologies in Canada
• Devices that Turn a Home into Smart Home
• Expensive Mansions in Canada and Their Prices

Home » Real Estate News » Real Estate Guide » Assignment Sales

Fundamental Difference Between a Resale vs Assignment Sales

June 21st, 2023 8 min read -->

A resale is a transaction where the buyer purchases a property from the original owner. The property is already completed and ready to move into. On the other hand, an assignment sale is a transaction where the buyer purchases the rights to a property from the original owner. The property is under construction and is still being prepared to move into. Here is a table that summarises the key differences between Resale vs Assignment Sales

Table of Contents

What are the Pros and Cons of an Assignment Sale?

Assignment sales, also known as contract assignments or flipping contracts, are common in the real estate market. In an assignment sale, a buyer who has entered into a purchase agreement with a seller transfers their rights and obligations under the contract to a third party before the completion of the sale. While assignment sales can offer certain advantages, they also have potential drawbacks. Let’s explore the pros and cons of Assignment Sales: 

Pros of Assignment Sales 

• One of the primary advantages of assignment sales is the potential for a significant profit. Assignors can secure a property at a lower price and then sell their contract to a new buyer at a higher price, capitalising on market appreciation or favourable negotiation.
• Assignment sales allow buyers to secure a property without obtaining a mortgage or making a down payment upfront. This flexibility can benefit investors or buyers who may need more immediate access to funds but want to secure a property at a particular price.
• Assignors can avoid the financial risks of property ownership, such as mortgage payments, property taxes, and maintenance costs. If the market conditions change or the buyer’s circumstances alter, they can sell the contract to another party without taking on these financial burdens.
• Assignment sales provide a quick exit strategy for buyers who may change their minds or encounter unforeseen circumstances that prevent them from completing the purchase. By assigning the contract to another buyer, they can exit the transaction without the complications of selling the property on the open market.

Cons of Assignment Sales

• Assignment sales involve intricate legal processes and require the involvement of multiple parties, including the original buyer, the assignee, the seller, and sometimes even lenders. The complexity can lead to challenges, delays, and increased legal expenses.
• The success of an assignment sale depends on the consent of the original seller. Some sellers may not permit or may have restrictions on assignment sales, limiting the pool of potential properties available for assignment.
• As an assignor, you relinquish control over the property and the final sale process once you transfer the contract to the assignee. This lack of control can be frustrating if the assignee’s actions or decisions affect the property negatively or lead to complications.
• In a declining market, an assignor may need help finding a buyer willing to pay the assigned price. This can result in financial loss if the assignor cannot sell the contract or need to sell it at a lower price than they initially anticipated.
• Some critics argue that assignment sales contribute to housing speculation and affordability issues, as they can drive up prices and limit housing supply. This perception can lead to negative public sentiment and potential regulatory scrutiny in some markets.

Assignment Sales for Sellers: What are its Advantages? 

• Higher Selling Price : In an assignment sale, sellers can sell their property more elevated than the original purchase price. Assignors, who act as intermediaries, often negotiate a higher price with the new buyer due to market appreciation, renovations, or other factors. This allows sellers to maximise their profit and earn more than anticipated.
• Faster Sale Process : Assignment sales can expedite the sale process for sellers. Rather than waiting to complete the original contract, sellers can transfer their rights and obligations to the assignee. This enables them to sell the property without going through the typical marketing and negotiation process, which can save time and effort.
• Avoidance of Holding Costs : Sellers can avoid holding costs associated with property ownership by selling through an assignment. These costs may include mortgage payments, property taxes, insurance, maintenance, and other ongoing expenses. Selling through an assignment allows sellers to transfer these responsibilities to the assignee, potentially saving them money in the long run.
• Increased Flexibility : Assignment sales provide sellers more flexibility regarding their plans. By completing the sale through an assignment, sellers can move forward with their plans without waiting for the original contract to close. This can be particularly advantageous if sellers need to relocate, downsize, or make other arrangements quickly.
• Lower Marketing Costs : When selling a property traditionally, sellers often need to invest in marketing efforts to attract potential buyers. This can include listing fees, advertising expenses, staging costs, and other related expenditures. In an assignment sale, the assignee typically assumes the responsibility of finding a new buyer, reducing or eliminating the need for sellers to incur marketing expenses.
• Minimised Default Risk : In certain situations, sellers may encounter circumstances that prevent them from completing the original purchase contract. This could be due to financial constraints, changes in personal circumstances, or other unforeseen events. By assigning the contract to a new buyer, sellers can avoid defaulting on the contract and potential legal consequences.

What are the Advantages of Assignment Sales for Buyers? 

Assignment sales offer several advantages for buyers in the real estate market. Here are the key benefits of assignment sales for buyers:

• Potential for Lower Purchase Price : Buyers engaging in assignment sales can secure a property at a lower purchase price than buying on the open market. Assignors often negotiate a favourable purchase price when they contract with the original seller. This can be advantageous for buyers looking for a good deal or who want to invest in properties with potential appreciation.
• Flexibility in Financing : Buyers participating in assignment sales can enjoy greater flexibility in financing options. Since they are buying the contract from the assignor, they may not need to secure a mortgage or make a substantial down payment immediately. This flexibility can be particularly beneficial for buyers needing more immediate access to large sums of money or facing challenges in obtaining traditional financing.
• Ability to Customize the Property : In some cases, buyers engaging in assignment sales can customise or make changes to the property before the completion of the sale. This flexibility allows buyers to tailor the property to their preferences by selecting finishes, fixtures, or design elements and creating a personalised living space or investment property.
• Potential for Profit : Assignment sales can provide buyers with profit potential. Suppose market conditions favourably change between the time the assignor entered into the contract and the completion of the sale. In that case, buyers can sell the property at a higher price, capturing the appreciation and generating a profit without ever taking ownership. This profit potential can attract investors or buyers looking for short-term gains.
• Expedited Purchase Process : Assignment sales can facilitate a faster buyer purchase process. Rather than going through the lengthy process of searching for a property, negotiating with sellers, and dealing with potential competing offers, buyers can step into an existing contract and finalise the sale with the assignor. This can save time and streamline the purchase process, allowing buyers to secure a property quickly.
• Lower Transaction Costs : Assignment sales may involve lower buyer transaction costs than traditional property purchases. Since buyers purchase the contract from the assignor, they may not need to pay certain closing costs associated with the initial purchase, such as land transfer taxes or legal fees. This can result in savings and make the overall transaction more affordable for buyers.

What Disadvantages Does a Buyer Face on Assignment Sales? 

Here are the key drawbacks of assignment sales for buyers:

• Limited Property Selection : Assignment sales often involve a limited pool of properties. Assignors may sell their contracts for various reasons, such as properties with a potential appreciation or in-demand locations. As a result, buyers participating in assignment sales may have fewer options than in the broader real estate market.
• Potential Seller Consent Issues : The success of an assignment sale depends on the consent of the original seller. Some sellers may have restrictions on assignment sales or may simply refuse to allow the transfer of the contract to a new buyer. This can create challenges for buyers who have invested time and effort into an assignment transaction only to have it rejected by the original seller.
• Lack of Control and Information : Buyers engaged in assignment sales have limited control over the original contract and the terms negotiated by the assignor. They may have yet to be involved in the initial negotiation process, which can lead to uncertainty about the terms and conditions of the purchase. Additionally, buyers may need more access to information about the property, its history, or potential issues, as they rely on the assignor for this information.
• Increased Complexity and Potential Delays : Assignment sales can be more complex than traditional property purchases. Multiple parties include the original seller, the assignor, and potential lenders. This complexity can lead to delays, as other legal and administrative processes may be required. Buyers may need to navigate various agreements and documents, potentially leading to more extended closing periods or increased legal expenses.
• Higher Risk of Non-Completion : Assignment sales carry a higher risk of non-completion than standard property purchases. Since buyers are assuming a contract from the assignor, they may face uncertainties and risks associated with the assignor’s ability to fulfil their obligations. If the assignor fails to complete the contract, it can lead to complications, potential legal disputes, and the loss of any invested time or resources.
• Market Fluctuations and Financial Loss : While assignment sales can offer profit potential, they also expose buyers to the risk of financial loss. Suppose market conditions decline or change unfavourably between the time of the assignment and the completion of the sale. In that case, buyers may need help to sell the property for a profit. Sometimes, they may need to sell lower than the initial purchase price, resulting in a financial loss.

What are the Disadvantages of Assignment Sales for a Buyer?

Here are the key drawbacks of assignment sales for buyers: 

• Limited Property Selection: Assignment sales often involve a limited pool of properties. Assignors may sell their contracts for various reasons, such as properties with a potential appreciation or in-demand locations. As a result, buyers participating in assignment sales may have fewer options than in the broader real estate market.
• Potential Seller Consent Issues: The success of an assignment sale depends on the consent of the original seller. Some sellers may have restrictions on assignment sales or may simply refuse to allow the transfer of the contract to a new buyer. This can create challenges for buyers who have invested time and effort into an assignment transaction only to have it rejected by the original seller.
• Lack of Control and Information: Buyers engaged in assignment sales have limited control over the original contract and the terms negotiated by the assignor. They may have yet to be involved in the initial negotiation process, which can lead to uncertainty about the terms and conditions of the purchase.
• Additionally, buyers may need more access to information about the property, its history, or potential issues, as they rely on the assignor for this information.
• Increased Complexity and Potential Delays: Assignment sales can be more complex than traditional property purchases. Multiple parties include the original seller, the assignor, and potential lenders. This complexity can lead to delays, as other legal and administrative processes may be required. Buyers may need to navigate various agreements and documents, potentially leading to more extended closing periods or increased legal expenses.
• Higher Risk of Non-Completion: Assignment sales carry a higher risk of non-completion than standard property purchases. Since buyers are assuming a contract from the assignor, they may face uncertainties and risks associated with the assignor’s ability to fulfil their obligations. If the assignor fails to complete the contract, it can lead to complications, potential legal disputes, and the loss of any invested time or resources.
• Market Fluctuations and Financial Loss: While assignment sales can offer profit potential, they also expose buyers to the risk of financial loss. Suppose market conditions decline or change unfavourably between the time of the assignment and the completion of the sale. In that case, buyers may need help to sell the property for a profit. Sometimes, they may need to sell lower than the initial purchase price, resulting in a financial loss.

You May Also Read :

Frequently Asked Question (FAQs)

What is the purpose of resale.

Resale is to transfer ownership of a previously owned item or property from the seller to a new buyer.

What is selling and reselling?

Selling refers to exchanging goods or services for monetary compensation, while reselling involves selling something previously purchased, typically to make a profit.

How much money can you make from resale?

The amount of money on resale depends on the type of property you have and the real estate environment of the area.

What is a good resale percentage?

The resale percentage depends on the real estate environment.

Contact Our Real Estate Experts

Recent blog posts.

Canada Guide

How To Move to Canada and Get Permanent Residence

Dreaming of maple leaf life? You're not alone! Canada has become a top destination for those looking to start fresh.…

Know Medical Services Free For International Students in Canada

Healthcare is the topmost priority, particularly for those who move to a new country or city. Start by compiling extensive…

Expert Tips And Strategies of Study in Canada in 2024

Do you plan to study at Canada's diverse and academically renowned institution in 2024? You are, however, not alone! With…

Guide To Canada Credit Score Affect The Job Application

In today's data-driven world, employers are increasingly scrutinising every aspect of a candidate's background, extending beyond traditional qualifications like education…

Explore The Best High Schools in Kitchener, Ontario

Choosing the best high school is one of the most important decisions a parent makes for their children. Opting for…

Immigrating to Canada: How to Move Your Belongings?

If you are considering moving to Canada, you’re in the right place. We provide a comprehensive guide on moving Canada…

Savings Guide For Your End-of-Year Family Vacation Ideas

After a year of driving to the same workplace for years, a terrible season finale, being called to your child’s…

Experience CN Tower Dining At its Finest

A restaurant performs many roles, it's a meeting site for family and friends to celebrate memorable events. It is a…

Why Should You Choose a Toronto Vacation Rental for Your Next Holiday?

Vacation Home Rental in Toronto translates to generous people, intercontinental cuisine, shopping streets, high art, and lush green scenery. When…

List of Budget Hostels and Hotels in Old Montreal

When we say travelling and exploring the world, cities like Montreal make it worth paying a visit and are an…

All About Ottawa International Airport YOW

With the nation's collective efforts to promote tourism, several airports in Canada have been spruced up to guarantee a delightful…

Toronto to Niagara Falls: Route, Price, Time and More

Niagara Falls offers one of the most incredible natural spectacles in North America. Toronto to Niagara transit is just a…

Investing in Bonds: Building a Resilient Financial Portfolio in Canada

Investing in bonds might be the only financial decision you make that transforms your life and your lifestyle. These guaranteed…

Guide To Reliable Investment Guaranteed Investment Certificate Canada

Guaranteed Investment Certificate Canada are a risk-free investment option offered by banks, credit unions, and other financial institutions in Canada.…

Guide To Know Common IRS Audit Triggers For Investments

Many people fear being IRS audit triggers, which can happen for various reasons, such as unverified deductions, unreported income, significant…

Understanding The Process of Buy Now Pay Later in Canada

Have you ever heard of Buy Now Pay Later in Canada? It's become quite the trend in the retail world…

Analyzing The Pros and Cons of Digital Cryptocurrency Investment

Cryptocurrency investment freedom from centralized authority, which protects them against meddling and government exploitation, is one of their alluring features.…

Difference Between ETF Vs Mutual Funds and Index Funds

Are ETFs good for beginners? Pros & cons of ETFs What is a mutual fund and how does it work?…

Early Mortgage Renewal: A Strategic Move for Savvy Homeowners

Your mortgage renewal is on the horizon, but did you know that renewing early could be a strategic move to…

How to Smartly Leverage Your Home Equity : Opportunities and Risks

Deciding whether to utilise home equity credit depends greatly on individual financial situations and goals. There are two primary types…

Turn Reverse Mortgage in Canada Into Lifetime Source of Income

Mortgage is bluntly known as the process of generating financial help from a high-valued asset, let’s say, a house. In…

Know The Income Needed to Get a Mortgage in Canada

In Canada, mortgages are an essential component for people who are looking to buy a property. Lenders, often banks or…

Unlocking Home Equity: A Guide On Taking Equity Out of Home

Have you been wondering how to take equity out of your home? If the answer is yes, look no further—you…

HELOC & The Credit Score: How Does The Former Impact the Latter

Home Equity Line of Credit (HELOC) is a popular means of credit in Canada. Simply put, it is a type…

You May Also Read

Real estate news & guide.

• Modern Duplex House Design
• Commercial Real Estate Agents in Canada
• Toronto Richest Neighbourhoods
• Buy a Leasehold Property
• Buy House Without Realtor
• Move to Brantford City
• Calgary vs Toronto
• Toronto Bridle Path
• Canada Noise Restrictions
• Toronto vs Vancouver

Calculators

• Calculate Square Footage
• Millimeters to Inches
• Feet to Centimeter
• 15 Centimeter to Inches
• Feet to Inches

Living & Lifestyle

• Students Drive Uber in Canada
• Canada's Most Expensive Cities
• Celebrity Homes in Canada
• Renew Canadian Health Card
• Canada Gold Investment

08 Sep 2011

What is an Assignment Sale and how do Assignments work?

Here’s how the assignment sale works in toronto real estate.

You may have heard the term “Assignment Sale” lately as it has become really popular with speculative condo investors.

Assignment Sales are defined as follows: The Assigning or Selling of your rights to purchase a property.

To clarify, you’re not actually selling the property. Since the Assignor (Seller) hasn’t taken possession yet (usually because it’s not built or has not registered yet), they are simply assigning the rights to the Assignee (Buyer).

Here’s an example: If I walked in to a condo sales centre,  signed and bought a pre-construction unit from the floor plans I would have the right to purchase said unit when it was constructed and registered. An Assignment Sale is when I take that paper that I signed, my right to purchase, and sell it to someone else; The Assignee, for a certain amount. To break it down, if I agreed to buy the condo for $300,000, then found a Buyer aka Assignee, the Assignee has the right to purchase said unit for $300,000 but he/she has paid me a premium on top of the $300,000 for that right.

A client just went through one of these for a condo that he had bought pre construction. He, as usual, got in over his head with purchases and decided to assign a unit in order to free up some cash to make the deposits on another place that he had purchased pre construction. After spending some time spreading the word and marketing the property I received a call from a colleague saying he had a buyer for me and we eventually made the deal happen. Here is how I structured the deal to make it work for my client:

He had paid $356,400 for this unit (I should say, he had agreed to pay that amount when it was ready a year or so from now).  He had made initial deposits of $53,750 , or 15% of the purchase price. My goal was to recover as much of that now for my client. Next, the buyer aka Assignee agreed to purchase said unit from my client for $380,000 . What this means is that he will eventually purchase the unit from the developer for $356,400 but give my client $23,600 for the right to do so (Total to the Buyer is $380,000).

So now the Assignee owes the initial deposit $53,750 plus the built in profit of $23,600 all totaling $77,350. Most people don’t have that kind of money lying around but since the money was needed right away we worked out a plan where he would pay the initial deposit of $53,750 now (borrowed from his parents) and the remainder of the cash from his mortgage when the condo was built and ready to register. We were lucky because the Assignee had the ability to come up with the cash.

Sometimes when the Assignee doesn’t have the option of paying out the Assignor it can be agreed that all the money will be transferred when the condo is ready and registered. An Assignor would likely agree to the latter only if the profit margins are much higher and the money is not needed right away. In this case since my client needed to be paid out now he accepted the small profit and was able to cash out and pay for his most recent purchase.

Assignment Sales, unlike resale transactions can get quite complicated. It is very important that you have an experienced Spring Realty Broker to work out the contract and an experienced real estate Lawyer to help mitigate risk for the client. I have been involved in hundreds of Assignment Sale transactions and with the help of Feld/Kalia Team of lawyers we get the job done right. Contact Us to get started.

Latest Blogs

17 Apr 2024

How the 2024 Federal Budget Affects Toronto’s Real Estate Market

19 Dec 2023

Week 198: Here’s how recent inflation news will affect the Toronto Real Estate market.

12 Dec 2023

Week 197: What’s going to happen this Spring? Beyond Blame and Politics in Toronto’s Market

(416) 822-7699

An assignment sale in the pre-construction market.

Assignment sales are a unique facet of the pre-construction real estate market, offering an alternative path for property transactions before a building is completed. This article delves into the intricacies of assignment sales, examining their role, process, and implications within the pre-construction market. By exploring the benefits and risks, financial aspects, and the current trends, we aim to provide a comprehensive understanding of how assignment sales function and their potential impact on buyers, sellers, and the real estate landscape.

Key Takeaways

Assignment sales allow original buyers to transfer their purchase rights to new buyers before the completion of a pre-construction property.

The process involves several steps, including legal considerations, marketing strategies, and the management of closing timelines and documentation.

These transactions offer benefits such as potential profit for sellers and early access to property for buyers, but also come with risks like market volatility and complex contract terms.

Financial implications include a unique cost structure with potential tax consequences, and buyers must often navigate limited financing options.

Market trends indicate that assignment sales are influenced by economic factors and regulatory changes, with future outlooks suggesting shifts in their prevalence and structure.

Understanding Assignment Sales

Definition and Basics of Assignment Sales

An assignment sale occurs when the original buyer of a pre-construction property sells their interest in that property before it is completed. Essentially, the original buyer, or assignor, transfers their contractual rights and obligations to a new buyer, known as the assignee. This type of transaction is particularly common in the pre-construction market for condominiums and new housing developments.

The key benefit of an assignment sale is the ability to transfer property ownership without waiting for the construction to complete. This can be advantageous for investors or buyers who need to liquidate their assets or who may have had a change in circumstances.

The assignor sells their contract to the assignee.

The assignee takes over the rights and obligations of the original purchase agreement.

The transaction typically requires the consent of the developer.

The Role of Assignment Sales in Pre-Construction

Assignment sales play a pivotal role in the pre-construction phase of real estate development. They offer a unique opportunity for original buyers to sell their purchase contract before the completion of the property. This can be particularly beneficial in a rapidly appreciating market, where the value of the property may have increased significantly since the initial sale.

The liquidity provided by assignment sales is essential for both developers and buyers. For developers, it ensures continuous cash flow and reduces financial risk by allowing original purchasers to transfer their obligations to new buyers. For buyers, it offers a chance to invest in real estate at a potentially lower price point and with more flexible terms than what might be available post-construction.

Flexibility is a key advantage of assignment sales, as they allow for changes in circumstances. Whether it's a change in financial situation, personal life, or simply a strategic investment decision, assignment sales provide an exit strategy for original buyers without the need to wait for the project's completion.

Assignment sales contribute to the dynamism of the pre-construction market, enabling a more fluid transfer of property rights and interests.

The following points highlight the role of assignment sales in pre-construction:

Facilitating early property rights transfer

Allowing original buyers to capitalize on market appreciation

Providing developers with a tool to manage cash flow and reduce risk

Offering buyers an alternative path to real estate investment

Enabling adaptability to changing market or personal conditions

Legal Considerations and Contracts

Navigating the legal landscape of assignment sales in the pre-construction market requires a thorough understanding of the contracts involved. The agreement between the original buyer and the assignee must be explicit in detailing the rights, obligations, and conditions of the sale. It's essential to ensure that the contract is compliant with local real estate laws and regulations.

Assignment contracts typically include clauses related to the original purchase agreement, the assignment fee, and any warranties or representations. Here are some key components that should be considered:

The original purchase agreement and its terms

The assignment fee and how it's structured

Representations and warranties by the assignor

Consent from the developer or builder

Closing adjustments and costs

It is crucial for both parties to seek legal advice before entering into an assignment agreement to prevent any future disputes or misunderstandings.

Failure to adhere to the legal requirements can result in penalties or the invalidation of the sale. Therefore, it is advisable to work with a real estate lawyer who specializes in pre-construction and assignment sales to navigate this complex process.

The Process of an Assignment Sale

Steps Involved in an Assignment Transaction

The assignment sale process in the pre-construction market involves several key steps that both the assignor (original buyer) and the assignee (new buyer) must navigate carefully. The first step is the consent of the developer , which is crucial as not all developers allow for assignments and their approval is typically required.

Next , the parties must agree on the terms of the sale, including the price and any conditions. This is followed by the preparation and signing of the assignment agreement, a legally binding document that transfers the original buyer's rights and obligations to the new buyer.

Identify a potential assignee

Obtain developer's consent

Negotiate terms and price

Draft and sign the assignment agreement

Fulfill any conditions precedent

Close the transaction and transfer ownership

It is essential for both parties to understand their rights and responsibilities as outlined in the assignment agreement to ensure a smooth transaction. Proper legal advice should be sought to navigate the complexities of the agreement and to protect the interests of both the assignor and the assignee.

Finding a Buyer: Marketing and Negotiation

Once the decision to pursue an assignment sale is made, the seller must embark on the journey of finding a suitable buyer . This process is critical and can be complex, involving strategic marketing and skilled negotiation. To effectively market an assignment sale, sellers should consider the following channels:

Online real estate platforms

Social media advertising

Real estate agent networks

Targeted email campaigns

Effective marketing is about understanding the target audience and tailoring the message to highlight the unique benefits of the pre-construction property.

During the negotiation phase, it's essential to be clear on the terms and conditions of the sale. The seller must be prepared to discuss the assignment fee , closing costs, and any other financial obligations. Negotiations can be a delicate balance between getting the best price and ensuring the sale moves forward. Remember, a successful negotiation results in a win-win situation for both parties involved.

Closing the Deal: Timelines and Documentation

Closing an assignment sale requires meticulous attention to detail and adherence to strict timelines. Documentation is key , as it provides proof of the agreement and outlines the responsibilities of each party. The closing process typically involves the following steps:

Review and finalize the assignment agreement.

Obtain necessary consents from the developer.

Secure financing and finalize mortgage details.

Conduct a title search and purchase title insurance.

Prepare and execute the closing documents.

It is crucial for both the assignor and assignee to understand the closing costs involved, which may include land transfer taxes, legal fees, and adjustments. A clear timeline should be established to ensure all parties are aware of their obligations and the deadlines.

The successful transfer of rights from the original purchaser to the assignee hinges on the thoroughness of the documentation and the ability to meet all contractual obligations within the agreed-upon timeframe.

Ensuring that all parties have a mutual understanding of the process and the associated deadlines can prevent any last-minute hurdles that could delay or jeopardize the sale.

Benefits and Risks of Assignment Sales

Advantages for Sellers and Buyers

Assignment sales offer unique benefits to both parties involved in the pre-construction market. For sellers, it provides an opportunity to liquidate their investment before the completion of the project, which can be particularly advantageous if their circumstances have changed or if the market conditions are favorable. Buyers benefit from potentially lower prices compared to the finished property market, as well as the chance to customize certain aspects of their future home.

Flexibility is a key advantage in assignment sales. Sellers can avoid the long wait and the carrying costs associated with the final stages of construction, while buyers can enter the real estate market without the typical bidding wars associated with completed properties.

Sellers' Advantages: Early exit from investment

Capitalization on market appreciation

No need to carry mortgage and maintenance costs

Buyers' Advantages: Lower entry price point

Customization options

Less competition

The synergy between the seller's desire to release capital and the buyer's search for value creates a dynamic market environment that can benefit all parties involved.

Potential Risks and How to Mitigate Them

While assignment sales can be lucrative, they come with inherent risks that both buyers and sellers should be aware of. Market fluctuations can significantly affect the value of the property between the time of the original purchase and the assignment sale. To mitigate this risk, parties should conduct thorough market research and consider timing their transaction to align with favorable market conditions.

Another risk involves the developer's consent , as not all developers allow assignments, and some may charge hefty fees. It is crucial to review the original purchase agreement and understand the developer's policies on assignments before proceeding.

Ensure all parties understand the terms and conditions of the assignment sale.

Obtain legal advice to navigate the complexities of the contract.

Secure financing early to avoid last-minute hurdles.

Buyers should be particularly cautious about the due diligence process, verifying the property's potential and the seller's right to assign the contract.

Finally, unexpected costs can arise, such as additional taxes or fees. Buyers and sellers should budget for these potential expenses and seek professional advice to understand the full financial impact of the transaction.

Comparing Assignment Sales to Traditional Real Estate Transactions

Assignment sales and traditional real estate transactions differ significantly in their structure and execution. Assignment sales offer a unique opportunity for buyers to step into the shoes of the original purchaser , often before the property is fully constructed. This can be particularly attractive in a rapidly appreciating market.

Traditional transactions involve the transfer of property from the current owner to the buyer, typically after the construction is complete. The process is more straightforward but may not provide the same level of investment opportunity as pre-construction deals.

Assignment Sale

Transfer of contract rights

Pre-construction phase

Potential for market value appreciation

Traditional Sale

Transfer of property title

Post-construction phase

Market value determined at the point of sale

In essence, assignment sales can be seen as a form of investment in the property's potential, whereas traditional sales are investments in the property as it stands.

Financial Implications of Assignment Sales

Understanding the Cost Structure

The financial landscape of an assignment sale is multifaceted, with various costs that both buyers and sellers must consider. Understanding the cost structure is crucial for all parties involved to ensure a fair and profitable transaction.

Initial Purchase Price and deposits already paid by the assignor form the base of the cost structure. On top of this, the assignor may seek to include a premium for the sale, reflecting any increase in the property's market value since the original purchase.

Additional costs may include:

Assignment fees charged by the developer

Legal fees for contract review and transfer

Real estate commissions if agents are involved

It's important for buyers to be aware of potential hidden costs, such as development levies or occupancy fees, that may not be immediately apparent.

Sellers should also consider the impact of capital gains tax, which can significantly affect the net proceeds from the sale. By carefully analyzing these expenses, both buyers and sellers can navigate the financial complexities of an assignment sale with greater confidence.

Tax Considerations for Buyers and Sellers

When engaging in an assignment sale, both buyers and sellers must be aware of the specific tax implications that can affect the profitability of the transaction. Tax liabilities can vary significantly depending on the jurisdiction and the individual circumstances of the parties involved.

For sellers, capital gains tax is a primary concern. If the property has appreciated in value since its initial purchase, the seller may be liable for taxes on the profit. In contrast, buyers should be mindful of the potential for land transfer taxes, which can add a substantial cost to the acquisition of the property.

Tax deductions may be available in certain situations, such as when a seller incurs expenses related to the sale. It is crucial for both parties to consult with a tax professional to understand their obligations and opportunities for savings.

The complexity of tax laws means that overlooking a critical detail can lead to unexpected financial burdens. Proper planning and advice are essential to navigate the tax landscape of assignment sales.

Here is a brief overview of common tax considerations in assignment sales:

Capital gains tax for sellers on the profit made from the sale

Land transfer taxes for buyers upon acquisition

HST/GST implications, particularly for new constructions

Potential for tax deductions related to sale expenses

The importance of accurate income reporting for both parties

Financing Options for Assignment Purchases

Securing financing for an assignment purchase can be more complex than obtaining a mortgage for a traditional real estate transaction. Lenders may have specific requirements and conditions when it comes to financing an assignment sale due to the nature of the transaction and the associated risks.

Buyers should be aware that not all lenders offer mortgages for assignment sales, and those that do may require a higher down payment or charge a higher interest rate. It's crucial to shop around and compare offers from various financial institutions.

Traditional Mortgage

Private Lender

Home Equity Line of Credit (HELOC)

Personal Savings

The key to successfully financing an assignment purchase is to understand the lender's perspective and to present a strong financial case. This often involves demonstrating a solid credit history, stable income, and a reasonable debt-to-income ratio.

Market Trends and Future Outlook

Current state of the pre-construction market.

The pre-construction market has been experiencing a dynamic shift in recent years, with a notable increase in the demand for pre-construction properties. This surge is driven by a combination of factors including urbanization, housing shortages, and the appeal of brand-new homes. Investors and end-users alike are showing a heightened interest in securing properties before they are built.

Urbanization and population growth fueling demand

Housing shortages leading to increased pre-construction projects

Technological advancements in construction promoting efficiency

The market's robustness is also reflected in the rising prices and the quick absorption rates of new developments. However, it's important to monitor the market closely as these trends can shift with economic and regulatory changes.

The financial landscape for pre-construction properties is also evolving, with new financing options emerging to accommodate the unique nature of these transactions. Buyers and sellers must stay informed about the latest developments to navigate the market effectively.

Predicting the Future of Assignment Sales

The future of assignment sales in the pre-construction market is shaped by a myriad of factors, including economic conditions, housing demand, and regulatory changes. Predicting the exact trajectory of this niche is never guaranteed , but certain trends can offer valuable insights.

Market dynamics play a crucial role in the viability and popularity of assignment sales. As housing markets evolve, so too does the attractiveness of these transactions. For instance, in a seller's market, assignment sales may become more prevalent due to increased demand and the potential for profit.

Economic forecasts and interest rates

Changes in housing supply and demand

Regulatory shifts and their impact on real estate practices

The adaptability of assignment sales to market conditions makes them a unique and flexible option for both buyers and sellers. This flexibility could be a key factor in their sustained presence in the real estate landscape.

While it's impossible to predict the future with certainty, stakeholders can stay informed and agile to navigate the potential shifts in the pre-construction market.

Impact of Economic and Regulatory Changes

The pre-construction market is sensitive to shifts in the economy and changes in government regulations. Economic fluctuations can significantly affect housing demand , altering the attractiveness of assignment sales. Interest rate changes, for example, can influence buyer affordability and thus impact the volume of assignment transactions.

Regulatory changes also play a crucial role. New laws can either facilitate or hinder assignment sales. For instance, policies aimed at cooling the housing market might include taxes or restrictions on assignment sales, which could reduce their frequency or profitability.

Understanding these factors is key to predicting the future of assignment sales:

Monitoring economic indicators such as employment rates, GDP growth, and inflation

Keeping abreast of new housing policies and tax laws

Assessing the impact of global economic events on local housing markets

Navigating the pre-construction market through assignment sales can be a strategic move for both buyers and sellers. For sellers, it offers a way to transfer their interest in a property before completion, potentially earning a profit without the need for final closing. Buyers, on the other hand, gain the opportunity to invest in a property that may have appreciated in value since its initial sale, often with more choices available than in the resale market. However, it's crucial to understand the complexities and legalities involved in assignment sales to ensure a smooth transaction. Both parties should seek professional advice to navigate the intricacies of contracts, financial implications, and market conditions. As the real estate landscape continues to evolve, assignment sales in the pre-construction market remain a viable and often lucrative option for informed investors and homebuyers.

Frequently Asked Questions

What is an assignment sale in the pre-construction market?

An assignment sale in the pre-construction market is a transaction where the original buyer of a property under development sells their interest in the purchase agreement to a new buyer before the completion of the construction.

Why would someone choose to sell their property through an assignment sale?

Are there legal considerations to be aware of when engaging in an assignment sale?

What are the financial implications for buyers and sellers in an assignment sale?

How does the process of an assignment sale differ from a traditional real estate transaction?

What are the potential risks of assignment sales and how can they be mitigated?

Recent Posts

Here’s Where First-Time Homebuyers Can Afford To Buy a Condo in the US

Maximizing ROI: Tips for Florida Real Estate Investors

Home Inspection Tips Every Buyer Should Know

• New Condos for Sale
• Platinum Access
• Resale Homes
• Real Estate Info
• Buyer’s Journey
• Online Condo Presentation
• Leasing Services
• Calculators
• Clients Stories
• City / Town
• Near Major Intersection
• Near Subway Stations
• Move In 2022
• Move In 2023
• Move In 2024
• Move In 2025
• Move In 2026
• Move In 2027
• Move in 2028
• Move in 2029
• Move In 2030

Boutique Condos

• Detached Homes
• Special Promotion

5% Down Condos

10% Down Condos

• Condos Coming Soon

Master-Planned Communities

Assignment Listings

• Near Urban Growth Centres
• Near Rapid Transit
• Near Major Intersections
• Richmond Hill
• King Township
• Scarborough
• Bowmanville
• Mississauga
• Halton Hills
• Springwater
• Wasaga Beach
• Collingwood
• All Locations
• Move In 2029

Important Update: Our Investment Presentation Seminar is now available twice a week. Learn More

GTA-Homes » Real Estate Info » Assignments

• Assignments

An Assignment Sale in the Pre-Construction Market

Simply put, an assignment sale is the sale - or an "assignment" of a contract to purchase a pre-construction condominium suite. An assignment sale is usually applied to the pre-construction condominium that has not been registered yet, so no one can take ownership of the unit itself. Only the contract can be sold.

When you purchase a pre-construction condominium unit, you may be given an assignment clause in your original Agreement of Purchase and Sale (APS). This is key. This clause gives you the ability to sell the rights to your unit before the condominium is even registered.

• Assignee/Buyer is not buying a property from Assignor – Assignee is buying the “right” to acquire property from a 3rd party (usually a builder)
• Assignor assigns its interest and rights in the Original Agreement with the Builder (or original seller)
• Assignor assigns to the Assignee its interest in the original “deposit”
• Assignee “assumes” and agrees to perform all of the Assignor’s obligations under the Original Agreement

Once the building has been constructed and registered by the city, the ownership will be transferred to the buyer. Until then, it’s just the sale of a contract, but as you will see, there are many advantages to these kinds of sales for both the buyer and seller.

In this article, you will learn more about assignment sales, why they are used, and how you can benefit from this unique transaction as an investor. This way, you will be able to determine if an assignment sale is right for you.

We at GTA-Homes strive to provide our clients with the knowledge of the pre-construction market so that they can make a more informed choice when it comes to investing in their future.

An assignment sale can be mutually beneficial for both the buyer and the seller.

See all assignment listings, what you'll learn..., what is an assignment sale, an example of an assignment sale, is it worth it to buy an assignment.

• Is it a Good Idea to Sell An Assignment

Assignments FAQ

The Details of an Assignment Sale

Assignment sales is not a new strategy in Canada, particularly assignment sales in Toronto. However, compared with other countries where condos have been around much longer, the process of assigning a condo in Ontario is not always well understood by sellers, buyers, agents, lawyers, and even lenders. Sellers who have been taking the time to learn about assignments have been reaping the rewards by maximizing their profits.

Why do pre-construction assignment sales happen?

There are many reasons why someone might want to sell the rights to their unit before it’s been built. For example, someone may have bought a suite that’s three years away from being completed, but recently had to relocate for a job. This buyer may need to sell their agreement to afford a property in their new city.

Another common reason is that a buyer began the purchase process when they were single but during the pre-construction process they married or are now expecting a child. Suddenly they’ve discovered that the pre-construction one-bedroom suite they bought is not big enough for a growing family.

The “ assignment clause ” in the purchase agreement comes in handy when these things happen. It allows the original buyer to pass the contract onto somebody else without accruing financial penalties.

These types of transactions are common and fully legal, but whether you are the buyer or the seller, it’s important to work with both an experienced realtor and lawyer who know how to protect your interests.

These deals are more complex than a conventional resale and involve three parties: the developer, the assignor and the assignee. It’s a two-stage process that involves both interim occupancy and the final closing.

This is just the basics of an assignment deal. There are more details regarding mortgage rules, and other contract details. Keep reading to learn more! Or you can always reach out to talk with one of our agents. We love to talk condos! This is just a general overview, but each arrangement is unique with its own rules, terms, and conditions.

We advise everybody who is thinking of buying or selling a pre-construction assignment to seek advice from a real estate agent, lawyer and tax accountant. Contacting an agent is important because assignors may have to pay a fair amount of tax on any profits they received from the completed sale.

Most builders allow assignment sales and you will often see these listings on REALTOR.ca. However, there are some rules in the original purchase agreement that must be followed. They are also more complicated than a regular sale because a mortgage cannot be obtained on the closing of the transaction, only once the building has been registered. Other issues such as occupancy, reimbursement of the seller’s deposits and more must be taken into account.

Pre-Construction Purchase

In 2017, John Smith bought a pre-construction condominium unit from ABC Developments for $400,000 with a total down payment of 20%, equalling $80,000. He signed the original Agreement of Purchase and Sale (APS), and the project is set to be completed in 2024.

Original Buyer Needs to Relocate

In 2023, John discovers he will be relocated to a new city for his job. He can't afford to buy a new home while holding onto his pre-construction condo unit.

Original Buyer Becomes an Assignor

Fortunately for John, the assignment clause allows him to sell the contract for his unit before the building is completed and registered! John becomes an assignor.

Assignee Buys the Rights to the Unit

John contacts an experienced pre-construction sales agent who networks on his behalf to find an interested buyer (an assignee). His agent finds Jane Doe, who wants a great deal on a new condo and decides to buy the rights to John's unit. As the assignee, Jane decides to make the purchase and agrees to perform all of the assignor's obligations outlined in the original APS. John has decided to sell the contract to his unit to Jane Doe. Due to the changes in the market, he was able to sell the contract for $500,000.

• Assignment Purchase:
• Assignment Agreement: $500,000
• Original Purchaser (Assignor) = John Smith
• New Purchaser (Assignee) = Jane Doe
• Vendor (Builder) = ABC Developments

Assignment Purchase Price by John Smith to Jane Doe = $180,000, due immediately. This includes a deposit of $80,000 + profit $100,000. The amount and timeframe for this payment can also be negotiated.

Assignee Moves In

In 2024 when the building is complete and ready for interim occupancy, Jane Doe will move into the unit during the occupancy period. At this point she will begin paying occupancy fees to the developer. These fees take the place of mortgage payments and condo fees until the building can be registered.

Interim occupancy happens when the city has designated the property as safe to live in. The building will be officially registered once the municipality does a final inspection. Jane Doe can occupy her suite in the meantime until the building is officially registered.

Assignment Details

When the building is officially registered by the city, the official title transfer takes place between the developer and the new purchaser. Jane Doe can finally register a mortgage and start paying her mortgage payments and condominium fees. Funds required to complete the sale by Jane Doe to the builder = $320,000

Jane Doe now has all the rights to the property, just like any homeowner. Any future re-sale of the property will consist of a regular real estate transaction.

Assignment purchases can actually give you some of the best deals in the GTA condo market because fewer people typically seek out these types of sales. In addition to fewer buyers, many real estate agents aren’t familiar with the structure of an assignment sale and often won’t bother to advertise these listings. Even lawyers may not know the ins and outs of an assignment sale.

The high demand in the resale market can potentially force buyers into bidding wars, which can cause people to overpay for their suite. Buying a contract through assignment gives you the opportunity to avoid excessive competition and often means you pay much less than you would for a resale unit.

The assignment condo market can be mutually beneficial for both the buyer and the seller. The seller can list their unit without having to wait until the building is completed, and the buyer can save time and potentially thousands of dollars.

Another advantage to buying an assignment agreement is that you will get a brand-new unit that automatically comes with the seven-year Tarion Warranty Program. Let’s not forget that you’ll likely move into the unit sooner instead of waiting the usual 3 to 4 years for the building to be completed!

Let’s Recap Some of the Advantages for Buyers:

• Options: More choices when there’s a shortage of listings in the market.
• Less Competition: Fewer people look at these types of listings.
• Peace of Mind: Fewer people looking at these sales means there’s less of a chance for a bidding war. You can avoid bidding wars and paying more than you can afford just to outbid another buyer.
• You Become A VIP: You will likely inherit VIP incentives like the seven-year Tarion Warranty Program and other incentives from the builder such as credits, upgrades, capped developing charges and much more.
• More Choices: Depending on how far along construction is, you may still be able to select your own finishes, colors and upgrades.
• Negotiate: Sellers usually need to sell because they need to drop their equity. This can give you leverage for prices, deposits, and closing dates.
• Brand New Suite: You will get your unit much faster instead of waiting 2-3 years like in a typical pre-construction contract. Oftentimes the occupancy date is just a couple of months away.
• Taxes: You may also benefit from saving on taxes like GST and HST.

We love to chat about the assignment sale market, so don’t wait, give us a call and let’s find you a great deal.

Is It a Good Idea to Sell An Assignment?

Traditionally, owners who wanted to sell their pre-construction units had to wait months or years for the final closing date to officially put their suite up for sale. By this time, they could have already put significant funds into occupancy fees and closing costs. If you find you want to sell your unit before its closing date, assigning it can be a great choice. This can help you save money and avoid paying occupancy fees and closing costs.

Assignments sales is not a new strategy in Canada, but compared to other countries where condos have been around much longer, the process is not always well understood by sellers, buyers, agents, lawyers, and even lenders. Sellers who have been taking the time to learn about assignments have been reaping the rewards by saving time and maximizing their profits.

These transactions are becoming increasingly popular. Think of it as a sort of condo flipping. Sellers can transfer their property rights during or before interim occupancy and avoid paying hefty carrying and closing costs, which helps them get their deposits back.

Most builders allow assignment sales, although they often have certain rules that must be followed. Even with strict rules in place, however, there are options available for you.

Let’s Take a Look at the Advantages for Sellers:

• Insurance Policy: In the event that your situation changes and you no longer need your unit, you are able to sell your assignment and pull out your equity.
• Gain a Profit: In a seller's market, you may be able to sell the rights to your unit at a higher price than you bought it, gaining a profit. This is like 'condo flipping'. In the right real estate environment, assigning your unit can be a lucrative financial move.
• No Carrying Costs: By passing the right to your unit to someone else, you can avoid paying monthly occupancy fees to the developer that can sometimes last up to two years.
• No Closing Costs: You don’t need to take out a mortgage or incur any other closing costs.

Register With GTA-Homes to Learn More

Our team of Platinum Agents is very well-versed in assignment sales and can help you make the most of your investment. Whether you are interested in buying or selling an assignment, we can help you follow the right track for the best possible outcome. There are excellent opportunities to be had now in the GTA. With a Platinum Agent, you can find 'hidden deals' that may not be advertised elsewhere. You can also gain access to eager buyers as a seller and get ahead. Register below and let us connect you with the best advice.

What is an Assignment Sale?

It is the sale of a contract to purchase a pre-construction unit. This means, instead of selling an already built unit, what’s being sold is the contract or right to acquire the property upon completion. The original purchaser (the "assignor") of a property sells their obligations under the original contract to a new purchaser (the "assignee").

The assignee will generally assume all of the assignor's duties and obligations, such as interest payments, taxes, and maintenance fees during interim occupancy. Upon completion, the assignee is granted the title to the real property and will incur all final closing costs.

Can any kind of purchase agreement involving a real estate transaction be assigned?

Under normal circumstances, any purchase agreement can be assigned, providing the agreement doesn’t prohibit it.

Is an Assignment legal?

It is legally permitted unless prohibited in writing in the original agreement of purchase and sale. In some cases, the developer may charge the assignor a fee for this kind of sale.

Is it necessary to get permission from the developer to assign the contract?

That depends. You need to consult your purchase agreement to get the specifics. Generally developers will not permit an assignment sale without their consent, which means you’ll need to consult with them and a legal representative. There have been incidents where an unauthorized assignment sale has resulted in the original agreement being terminated, and the deposit withheld!

Is there a standard legal form for these types of sales?

Yes, there are two: OREA Form 150 Assignment of Agreement of Purchase and Sale Condominium and OREA Form 145 Assignment of Agreement of Purchase and Sale (including applicable schedules.) In most cases, the developer will have their own form as well.

Will either the assignor or assignee’s lawyer services be adequate?

It is essential that the assignor and assignee each retain a lawyer with expertise in this area of real estate.

Can the assignor’s realtor market the assignment listing on MLS or REALTOR.ca?

Sometimes. Double check with your builder, as it depends on whether they permit advertising.

What happens if the construction, occupancy, closing, or unit transfer date is delayed?

In the event of a delay, the agreement is still valid. This means the assignee has agreed to take on the agreement and all responsibilities associated with it, including delayed construction or occupancy.

What if the assignee doesn't close?

This is no different than any other property sale, meaning the assignor, in most cases, is not released from the obligations under their original purchase agreement. In this situation, both the assignor and assignee will be liable.

What is the cost of assigning an Agreement of Purchase and Sale?

If the developer consents to the arrangement, there will generally be an administration fee and legal fees. These fees will vary. Consult the original purchase agreement and the developer for specific information.

When does the assignor get their money?

This generally depends on the closing date and the terms of the agreement that the assignor and assignee agreed on. Usually the assignor is paid when:

• the assignee takes possession or,
• when the developer approves the process, if applicable or,
• when the assignee obtains legal title

Who gets the interest, if any, payable by the builder on the original deposits?

Unless otherwise specified, the interest is likely to be paid to the assignor.

Who pays the interim occupancy costs?

Once the assignment is finalized, the assignee will typically pay occupancy costs.

What closing fees are payable?

After the condominium is registered, the builder transfers the ownership title to the assignee. The assignee pays the balance to the builder and any amount still owed to the assignor. Some of the costs the assignor may pay include:

• Estimated property taxes for up to 2 years
• Hydro/water/gas meter installation and connection charges (approx. $500–$700 per meter)
• Development charges/levies (potentially thousands of dollars)
• Tarion New Home Warranty (ranging from $600–$1,900. See Tarion website for fee structure)
• Discharge of builder’s mortgages (approx. $200–$300 per mortgage)
• Builder’s lawyer’s Law Society charge (approx. $70)
• Two months of occupancy fees for reserve fund
• Other amounts set out in the Agreement of Purchase and Sale

These costs are typically not financed with a mortgage. The assignee is responsible for the following additional fees:

• Legal fees and disbursements
• Land transfer tax (provincial and municipal)
• GST/HST rebate
• Municipal levies

If you are interested in either buying or selling a pre-construction condo assignment, working with a realtor who is experienced in finding, negotiating and drawing up an offer for these types of sales can be invaluable. You’ve come to the right place! At GTA-Homes, we have a wealth of expertise, knowledge and resources when it comes to assignment sales. We would be more than happy to assist you in finding an excellent opportunity in the GTA for a prosperous future. Register now to connect with our award-winning team.

Check Out These Helpful Buying / Investing Articles…

• Why Pre-Construction Condos Are the Best Investment
• Most Frequently Asked Questions
• Why Buy With a Platinum Agent
• Interim Occupancy and Final Closing
• Steps to Buying a Pre-Construction Condo
• Renting vs Buying
• Condo Investments
• Pre-Construction Condo Closing Costs
• Pre-Delivery Inspection
• Statement of Critical Dates
• Condo Project Cancellations
• First Time Home Buyer Incentive
• Community Benefits Charges
• Glossary of Real Estate Terms and Definitions
• How Condo Developers Determine Price Per Square Foot
• Section 37 Levies
• 10 Day Cooling Off Period
• Development Charges and Levies
• Important Documents to Review When Purchasing a Pre-Construction Condo
• Land Transfer Tax
• Condominium Registration
• Condominium Corporations
• Condo Reserve Fund
• Inclusionary Zoning
• Common Elements
• Raising Issues With The Condo Board
• Condominium Management
• Requesting Condominium Records
• Meetings and Voting In A Condo Corporation
• Condominium Insurance
• Renting Your Condo Unit
• GST/HST New Housing Rebate
• What Are Interest Rates?
•  Everything You Need to Know about Mortgages
•  What Is the Ontario New Home Warranty Program?
•  Deposit Structures for Pre-Construction Condos
•  What Are Condo Maintenance Fees?
• Do I Need a Property Manager?
• How to Find Qualified Tenants for Your Rental Property
• What Are Buyer Incentives?
• What Are The Motives For Investing in Real Estate?
• What is Title Insurance?
• What is Delayed Occupancy?
• How to Pay Off Your Mortgage Faster
• First Home Savings Account (FHSA
• Landlord and Tenant Rights and Responsibilities
• The Best Building Amenities for Your Condo Investment
• How to Read Condo Floor Plans
• How Real Estate Pricing Has Changed In the Last Four Decades
• Local Area Amenities That will Increase Your Condo Investment Value
• Invest in Real Estate for Wealth and Retirement
• The Home Construction Regulatory Authority (HCRA)
• What to Consider When Selecting the Ideal Condo
• Residential vs Commercial Mortgages
• How To Choose the Right Condos Floor Plans
• What to Look For in a Condo Developer
• Renting to Student Tenants

Read more Buying/Investing articles

NEW CONDOS IN THE GTA

Toronto New Condos

North York New Condos

Etobicoke New Condos

Mississauga New Condos

Scarborough New Condos

Markham New Condos

Vaughan New Condos

Oakville New Condos

Richmond Hill New Condos

Aurora New Condos

Thornhill New Condos

Brampton New Condos

Pickering New Condos

Ajax New Condos

Newmarket New Condos

Burlington New Condos

Oshawa New Condos

Scugog New Condos

Caledon New Condos

Whitby New Condos

Whitchurch-Stouffville New Condos

King New Condos

Milton New Condos

Clarington New Condos

OTHER REGIONS

Waterloo New Condos

Brant New Condos

Innisfil New Condos

Kitchener New Condos

Niagara Region New Condos

Grimsby New Condos

Hamilton New Condos

Barrie New Condos

Montreal New Condos

Kingston New Condos

Guelph New Condos

Cambridge New Condos

Halton Hills New Condos

Brantford New Condos

Prince Edward County New Condos

Shelburne New Condos

Springwater New Condos

Bradford New Condos

North Bay New Condos

London New Condos

Ottawa New Condos

Belleville New Condos

SEARCH CONDOS BY

Coming Soon VIP Condos

Platinum Access VIP Condos

Special Promotion Condos

SEARCH BY OCCUPANCY

Ready to Move in 2022

Ready to Move in 2023

Ready to Move in 2024

Ready to Move in 2025

Ready to Move in 2026

Ready to Move in 2027

Ready to Move in 2028

Ready to Move in 2029

SEARCH BY TYPE

Luxury Condos

Waterfront Condos

Seven Essentials When Preparing to Sell Your Business

Before you put your business up for sale, make sure these seven ducks are in a row to help with a smooth process and transition.

• Newsletter sign up Newsletter

Awareness and preparation are critical in understanding the complexities and nuances involved in selling a business. It's a significant decision that requires meticulous planning and strategic considerations.

Whether you're a seasoned entrepreneur or a first-time business owner, preparing to sell your business demands careful attention to detail. Here, I outline the seven essentials to consider when embarking on this transformative journey.

1. Ensure your financial readiness.

Before listing your business for sale, ensure your financial house is in order. Review your financial statements, including income statements, balance sheets and cash flow projections. Identify areas for improvement and implement strategies to maximize profitability .

Subscribe to Kiplinger’s Personal Finance

Be a smarter, better informed investor.

Sign up for Kiplinger’s Free E-Newsletters

Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.

Profit and prosper with the best of expert advice - straight to your e-mail.

A potential buyer will scrutinize your financials, so transparency and accuracy are paramount.

2. Establish valuation and a pricing strategy.

Determining the value of your business is a critical step in the selling process. Seek professional valuation services to assess both tangible and intangible assets accurately. Avoid overpricing or undervaluing your business, as this can deter potential buyers or lead to missed opportunities.

A well-researched pricing strategy based on market trends and industry comparables can help attract qualified buyers and optimize sale proceeds.

3. Optimize your operations.

Streamline your business operations to enhance efficiency and maximize value. Identify areas for improvement, such as cost-reduction initiatives, process automation and scalability enhancements.

A well-oiled operation not only improves your business's attractiveness to buyers but also ensures a smoother transition post-sale.

4. Do a legal and compliance review.

Conduct a comprehensive review of your business's legal and regulatory compliance to mitigate risks and avoid potential liabilities. Address any outstanding legal issues, such as contracts, leases, permits and intellectual property rights.

Engage legal experts to draft necessary agreements, including sales contracts, nondisclosure agreements (NDAs) and noncompete agreements , to protect your interests throughout the transaction.

5. Determine market positioning and a marketing strategy.

Develop a compelling narrative that highlights your business' unique value proposition, competitive advantages and growth potential. Tailor your marketing materials, including prospectuses, pitch decks and online listings, to resonate with potential buyers.

Leverage various marketing channels, such as industry networks, online marketplaces and business brokers, to reach a diverse pool of qualified buyers and generate interest in your business.

6. Prepare for due diligence.

Anticipate the due diligence process by organizing all relevant documents and records in advance. Provide prospective buyers with access to financial statements, tax returns, customer contracts, employee agreements and other pertinent information in a secure and organized manner.

Proactively address any potential red flags or areas of concern to instill confidence and facilitate a smoother due diligence process.

7. Get professional guidance and negotiation expertise.

Seek guidance from experienced professionals, including financial advisers , attorneys and business brokers, to navigate the complexities of selling your business. Collaborate with trusted advisers to develop a negotiation strategy that maximizes your interests while fostering a mutually beneficial outcome for all parties involved.

Remain flexible and open-minded during negotiations, focusing on achieving your overarching goals and objectives.

In conclusion, selling a business requires careful planning, diligent preparation and strategic execution. By prioritizing these seven essentials — financial readiness, valuation, operational optimization, legal compliance, market positioning, due diligence preparation and professional guidance — you can enhance the likelihood of a successful and lucrative business sale.

Embrace the opportunity to embark on this transformative journey with confidence, knowing that you have the support and expertise needed to navigate the complexities of the selling process.

Remember, selling your business is not just a financial transaction — it's a milestone that marks the culmination of your hard work and dedication as an entrepreneur. With careful planning and strategic foresight, you can unlock the full potential of your business and embark on a new chapter of growth and prosperity.

Securities and advisory services offered through Commonwealth Financial Network®, member FINRA/SIPC, a Registered Investment Adviser. Fixed insurance products and services are separate from and not offered through Commonwealth Financial Network. Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®. CERTIFIED FINANCIAL PLANNER™ in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.

Related Content

• You’ve Just Sold Your Business: Now What?
• Six Retirement Account Wins for Employers and Employees
• Five Tax Breaks Business Owners Might Not Know About
• Are You Ready for the Corporate Transparency Act?
• A Tax Planning Cautionary Tale: Timing and Formalities Are Critical

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA .

To continue reading this article please register for free

This is different from signing in to your print subscription

Why am I seeing this? Find out more here

Dennis D. Coughlin, CFP, AIF, co-founded CG Capital with Christopher C. Giambrone in 1999. He has been in practice since 1996 and works with individuals nearing retirement and those whom have already retired. Proud of his humble upbringing, Dennis shares his advice with the same core principles that he was raised with. When not in the office, you will find him with his family enjoying the outdoors.

Kiplinger Readers' Choice Awards The results are in for the 2024 Kiplinger Readers’ Choice Awards — celebrating the best products and services in personal finance.

By Lisa Gerstner Published 28 May 24

Nvidia stock popped on a strong round of funding for Elon Musk's AI startup.

By Karee Venema Published 28 May 24

Despite the presidential election’s domination of the headlines, economic and inflation trends have consistently outweighed electoral outcomes in the past.

By Adam Lampe Published 28 May 24

Consumer advocate says there’s more deception in the world of online reviews than people realize. She recommends getting tips from friends and family instead.

By H. Dennis Beaver, Esq. Published 28 May 24

These financial support programs help military veterans and their families with home loans, disability and survivor benefits and more.

By Zach Mindel Published 27 May 24

To better protect your wealth, keep your eye on tax efficiency, appropriate insurance coverage and the possibility of multiple market outcomes.

By Nathan Hoyt, CFP® Published 27 May 24

What can you count on besides death and taxes? That older adults will get scammed, even savvy ones like me. Here are scams to watch for and how to get help.

By Neale Godfrey, Financial Literacy Expert Published 26 May 24

These important issues are all connected and can affect your taxes, likely setting them at a certain level for the rest of your retirement.

By Erik Bowman, RICP, NSSA Published 26 May 24

You might not see much in the way of tax breaks on a vacation home, but these three tax considerations could make a difference.

By Evan T. Beach, CFP®, AWMA® Published 26 May 24

When you inherit an IRA, you likely have a lot of questions. Do you need to take RMDs? When? How long do you have before the account must be cleaned out?

By Vincent Birardi, CFP®, AIF®, MBA Published 25 May 24

• Contact Future's experts
• Terms and Conditions
• Privacy Policy
• Cookie Policy
• Advertise with us

Kiplinger is part of Future plc, an international media group and leading digital publisher. Visit our corporate site . © Future US, Inc. Full 7th Floor, 130 West 42nd Street, New York, NY 10036.

• Success Stories

They Ask, You Answer Mastery

A coaching & training program that drives unmatched sales & marketing results.

Sales Performance Mastery

Improve the competencies and close rates of your sales organization.

Website Mastery

Web design, development & training for your team.

HubSpot Mastery

Everything you need to get the most from HubSpot.

AI Enablement Mastery

Unlock the power of AI in all aspects of your revenue operations.

More Services

• Paid Search & Social
• Request a Speaker
• Join the Community

Learning Center

Free resources to help you improve the way you market, sell and grow your business.

• Podcast Episodes
• Tools & Assessments

Quick Links

• What is They Ask, You Answer
• Free Sales & Marketing Assessment
• Certifications
• The Endless Customers Podcast
• Meet the Team
• Certified Coaches

Ready to Get Started?  They Ask, You Answer 90-Day Starter Guide

Ready to Get Started?

By Melissa Prickett

May 19, 2020

Join 40,000+ sales and marketing pros who receive our weekly newsletter.

Get the most relevant, actionable digital sales and marketing insights you need to make smarter decisions faster... all in under five minutes.

How Assignment Selling Has Made Me a Better Salesperson

Whether you’ve been in sales for 20 minutes, 20 months, or 20 years, selling business to business or business to consumer, adopting assignment selling will change your life, and I’m here to tell you first hand how it will make you a better sales person.

Sales comes down to one fundamental belief: trust. And when someone knows, likes, and trusts you, you can build a relationship faster and shorten that gap during the buying process.

Many people get into sales because it allows greater income potential and offers the flexibility that traditional jobs don’t.

But that doesn’t mean sales professionals want to work around the clock just to feed our families. We don’t like to be stuck in a box. We are creative, talkative, hungry for a challenge, and at our core — just really like to help people.

Out of necessity, we are constantly striving to become more efficient, to increase our skills.

But in the day to day, we find ourselves talking to more prospects than ever, faced with more resistance, hard questions, and endless objections. As a result, we work longer hours and spend more time behind the wheel or in front of the keyboard.

Assignment selling can be the answer for you if you apply it right.

But first, a reminder of how far we've come:

Let’s define assignment selling

Assignment selling is the process of intentionally using educational sales enablement content you have created about your products and services to resolve the major concerns and answer the burning questions prospects have so they are much more prepared for a sales appointment.

In layman’s terms, it means answering your prospect’s questions before they ask them on a sales call. Think about it: How much research do you do online before you buy something new? Studies show the average is 70% — and that’s increasing every day.

No one wants to talk to a sales person until they’re pretty convinced they know what they want to buy. They want to do their own research, they want to get answers to their questions about cost, problems, and comparisons.

In today’s digital world, you should be able to find out most of that information yourself online. And then, when you’re pretty sure you want to buy that product or service, that’s when you contact the company and speak to a live person to help you make a final decision. 

If this is true, then why do we continue to live in a distorted reality that a prospect has to come to a salesperson for all the answers? They don’t.

And the more we empower the buyer to get those questions answered without having to talk to us, the closer we will get to the sale without having to do anything except keep them moving through the sales process.

How do we do that? By being transparent about the buyer’s questions before and during the sales process. 

Chances are, if you’ve been asked a question once, you’ve been asked it multiple times, and you’ll be asked it from future prospects as well. 

Getting started with assignment selling

As a first step, here are some examples you, as a sales rep, could ask yourself:

• What questions do you currently get asked the most often?
• What are you currently being asked that buyers should know every time?
• What questions do you get asked that immediately indicate the buyer is not close to ready to make a decision?
• What do your clients and buyers push back on the most?
• What are your buyers’ biggest doubts or worries (with respect to the product, the process, or the company)?
• What do your buyers have to convince their key decision-makers of?
• Why are people not buying from you?
• What are the things that your customers must see and believe in order to move to the next stage?
• What are the things that would cause a client NOT to move to the next stage?

Once you’ve answered these questions you can get your team involved to create that video or written piece of content that answers these buyer questions . Then publish it as a blog article or a page on your site, and use that content in your sales process.

Assignment selling allows you to spend more time on better fit prospects

How many prospect calls have you had in the past week that were just not a good fit for your product or service?

How far into the conversation did it take you to realize that? How much time did you spend researching your prospect before you met with them? How many hours did you spend on the presentation deck before the call? How frustrated were you when they weren’t a good fit? 

Now, imagine a scenario where each prospect gets a video before the first sales appointment. This video explains some of the commonly asked questions that normally get asked in the first call.

Here at IMPACT, we call this an 80% video . Why? Because it answers 80% of the questions prospects would ask on the first call.

Based on their years of experience, our sales team put together a list of the commonly-asked questions we get on the first call.

We then send a two-minute video to all prospects before that first call and ask them to watch it. I ask each prospect to watch it before our call and if they can’t, to please reschedule out of respect for both of our time.

Think about it. If they aren’t willing to spend two-minutes watching a video, how well do you think that first appointment will go? 

We can tell from our HubSpot analytics  if they’ve watched it or not, and if they haven’t — I reschedule the call.

This saves me time talking to someone who is not up to speed on some of our services and a range of costs they can expect working with us.

If they have watched the video and especially if they’ve visited several pages on our website, we can have a more fruitful conversation.

The prospect can spend more time talking with me about how to move forward versus me having to educate them.

Assignment selling speeds up the sales process

You may live in the world of the one-call close, but more often than not, buyers are not making a decision in just one meeting. And that’s where assignment selling comes in to speed up the sales process. 

If you’ve sent your prospect the 80% video , chances are they will come well qualified and you will have a great first meeting. But what happens when you come to the end of that first meeting and that person isn’t ready to buy? Maybe you need to set up a demo.

Perhaps the prospect needs to bring in their boss to the next meeting. There are often just too many variables that go into the sale to finalize everything in just one meeting.

So, set the next meeting but don’t leave it at that. Send them something in between and tell them you want them to review it in advance of the next call.

If you’ve been compiling a list of questions and objections you get in the sales process, this will become easier over time; eventually you can create a library of materials to send between meetings.

You can then even create templates with the most relevant materials, spend just a little time customizing that follow-up email to your prospect based on the call, and press that send button.

I always stress to the prospect that I am going to be sending them something and that I expect them to review it before our next meeting.

If you have analytics like we do, you can see exactly how many pages they’ve read and even how much of the video they have watched.

I now know going into my next meeting just how invested that prospect is. Have they opened the email? Have they read the articles? Have they watched the video? 

Then, the next conversation is not a sales pitch. It starts with questions like “what was your biggest takeaway from the information you’ve reviewed since our last meeting?” or “from the video that you watched, what specific questions do you have?” 

Then you can get right down to business because you know you have an engaged buyer and you can have a much more productive conversation. 

Assignment selling increases your close ratio

If you’ve started to use assignment selling in your sales process before the first call to pre-qualify good fit customers and dis-qualify bad fit ones, you’ve likely saved time already. 

Now you’re having first conversations with better fit buyers. They come to the first call having some of their initial questions answered.

Based on what they tell you, you can send them additional materials to review in advance of the next call.

Never just send them the information and hope they call. Tell them you’re going to send them the information and book the next call. 

It is perfectly acceptable to say “I’m going to send you this information to review in advance of our next call. If, after reviewing it, you decide it doesn’t make sense to have the next call, either you’ve decided yes, you’d like to proceed or no, you’re going to go another route, we can cancel that call.” 

By getting right to the point and using assignment selling, it saves time for you both.

If they don’t do the homework and cancel the call, you haven’t wasted any more time.

If they do the homework and decide to buy, you have shortened the sales cycle.

If they do the homework, get on the next call and continue through the sales cycle more familiar with how you can help, you’re on the right track.

When you update your CRM with your calls at the end of the week and you see that you had fewer calls, but more time spent on quality calls, and closed more business using assignment selling, your close ratio will have gone up and your boss will smile.

Not only is your close ratio higher, but you’re closing more deals and better deals.

My best advice for getting started with assignment selling

You can see how assignment selling can save you time, have you connecting with better fit prospects, and improve your close rate. 

Content never sleeps. But we as salespeople do.

To get started with assignment selling, review the nine questions I asked earlier in this article to help you get started. Involve anyone in marketing and leadership to get these articles and videos written and published. Then start using these resources immediately. 

And if you need more actionable tips about how to put this into place, I invite you to sign up for IMPACT+ and take our free 30-minute course on assignment selling. 

Related Articles

How to know when you’ve outgrown hubspot sales hub starter.

Sales and Marketing Friction is Hurting Your Bottom Line – Here’s What to Do About It

Build a winning sales culture: 6 steps for sales managers and reps, 4 smart ways to fix your sales presentations.

What is 'Assignment Selling'? Using Content to Close Deals Faster

5 Real-Life Sales Scenarios Where You Need Assignment Selling (w/ Templates)

The 7 Most Common Sales Problems — And How To Solve Them

The best sales enablement tools for your team in 2024, sales vs marketing in 2024: what’s the difference.

4 Common Assignment Selling Mistakes (and How to Fix Them)

A sales presentation is not what your buyers want.

HubSpot CRM Review — Pros and Cons

Your buyers want to control the sales process; here’s how to let them, the best sales training programs check these 4 boxes, my best sales reps haven’t hit their quotas all year: what do i do, how to run a revenue team meeting (+ example agendas).

How To Improve Your Sales Process

How to create a sales process that closes more deals.

5 Ways to Get Your Sales Team Excited About Creating Content

The lazy sales technique your buyers hate scoping disguised as discovery, 4 tried-and-true tips for using video in sales prospecting.

4 Videos That Will Streamline Your Sales Process — And Don’t Require a Videographer

Here's Why You Keep Getting Garbage Inbound Marketing Leads

How Does They Ask, You Answer Benefit Sales?

What is a revenue team, join the 40,000+ sales and marketing pros who receive our weekly insights, tips, and best practices., thanks, stay tuned for our upcoming edition..

Salesforce is closed for new business in your area.

• Search Please fill out this field.
• Manage Your Subscription
• Give a Gift Subscription
• Newsletters
• Sweepstakes
• Flight Deals

Frontier's Latest Sale Has Flights to Savannah, Chicago, and Dallas Starting at $59 — When to Book

The fares come with a free carry-on bag.

Daniel Brenner/Getty Images

It’s a summer of savings for travelers on low-cost airlines. Denver-based Frontier Airlines recently announced a " Summer of Love " sale which provides discount tickets as low as $59, and includes a free seat assignment, and a free carry-on bag.  The sale provides discounted fares to a variety of domestic and international destinations including Atlanta, Cancun, Las Vegas, New York City, Orlando, and Tampa. Tickets must be purchased by June 6, 2024, and are subject to availability, according to the sale’s website.  Travel + Leisure spotted one-way deals available including:

• Atlanta to/from Dallas for $59
• Nashville, TN to/from Chicago (ORD) from $59
• Cleveland, OH to/from Jacksonville, FL from $59
• Fort Lauderdale, FL to/from San Juan, PR for $69
• Orlando, FL to/from St. Croix (VI) from $79

The discount fares also include flights to an airport based in a popular summer getaway, Savannah/Hilton Head International Airport. Flights to the region are available from Cleveland, Denver, and Philadelphia starting at $59. The airport, which provides access to both Savannah, GA and Hilton Head, SC was ranked as the top domestic airport in T+L’s World Best Awards of 2022 .  Additional discounts on fares are available to members of Frontier's paid subscription program, Discount Den . The service provides access to additional savings and benefits such as free tickets for children, for an annual fee of $59.99.  Frontier has recently announced several customer enhancements , including eliminating change and cancellation fees for most tickets. The airline also introduced new fare classes including basic, economy, premium, and business, to make it easier for passengers to understand the differences and amenities with each. For example, the basic category does not include a carry-on item, but that is included with the economy category.  “With the recent debut of ‘The New Frontier,’ featuring transparent pricing and no change or cancel fees, we have launched a ‘Summer of Love’ sale offering ultra-low fares that include all the features important to customers in the upfront price,” Frontier Airlines Vice President of Marketing Tyri Squyres said in a statement shared with T+L.

• SI SWIMSUIT
• SI SPORTSBOOK

Chris Sale Does Something Not Done in Last 21 Years of Atlanta Braves History

Brady farkas | may 28, 2024.

• Atlanta Braves

When Chris Sale helped the Atlanta Braves beat the Pittsburgh Pirates on Sunday afternoon, he accomplished something not done in the last 21 years of franchise history.

Per @MLBStats on social media:

Chris Sale is 7-0 with a 1.17 ERA over his last seven starts. He's the first @Braves pitcher to win seven consecutive starts since Russ Ortiz in 2003.

Chris Sale is 7-0 with a 1.17 ERA over his last seven starts. He's the first @Braves pitcher to win seven consecutive starts since Russ Ortiz in 2003. https://t.co/qMw8KDTFwL — MLB Stats (@MLBStats) May 26, 2024

When healthy, Sale has been capable of putting up numbers like this all throughout his career. However, the problem is that he hasn't been healthy lately. Sale missed time with arm issues at the end of 2019 and then missed all of 2020 with Tommy John surgery. He missed most of 2021 while rehabbing that injury. He made only two starts in 2022 because of a series of freak injuries and then made 20 starts in 2023.

All of that occurred with the Boston Red Sox, who elected to trade Sale this past offseason rather than wait to see if he could get healthy and perform like this.

Sale is 8-1 with a 2.12 ERA for Atlanta, striking out 78 batters in 63.2 innings.

Sale is in the 14th year of his pro career (15 if you include the missed 2020 season), with the Chicago White Sox, Red Sox and Braves. He helped the Red Sox win the 2018 World Series and is 128-81 lifetime with a 3.07 ERA. He's a seven-time All-Star who has received Cy Young votes in seven different seasons.

The Braves are 30-21 and will play the Washington Nationals on Tuesday night at 7:20 p.m. ET.

Follow Fastball on FanNation on social media

Continue to follow our Fastball on FanNation coverage on social media by liking us on  Facebook  and by following us on Twitter  @FastballFN .

BRADY FARKAS

Brady Farkas is a baseball writer for Fastball on Sports Illustrated/FanNation and the host of 'The Payoff Pitch' podcast which can be found on Apple Podcasts and Spotify. Videos on baseball also posted to YouTube. Brady has spent nearly a decade in sports talk radio and is a graduate of Oswego State University. You can follow him on Twitter @WDEVRadioBrady.