Do assignments only happen with pre-construction condos?

This is not true. Any kind of agreement can lead to assignment, and in this case, any type of property that is under construction can lead to assignment. Several types of properties can be assigned, including newly constructed homes, condos, industrial units, and so on.

As long as the Original purchase agreement does not restrict assignment, you may assign it. Nevertheless, most New Construction Condo Agreements specifically address the issue of ‘Assignment.’ A typical agreement specifies the circumstances under which it is allowed and the costs associated with doing so. Thus, the Developer must approve the Assignment Agreement before any monies are transferred between the Original Buyer and the New Buyer.

What would make someone want to assign a condo?

Pre-construction sales often have a long time lag between when the original contract is signed, when the buyer can move in (the interim occupancy period), and when the sale closes. During any time from date of purchase until final closing, a Buyer’s circumstances are likely to change. Buying a condo 3 to 5 years ago may have worked for the buyer’s lifestyle then, but it may not work now as circumstances have changed.

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. Therefore, assignment sale is the only option.

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.

Buying and selling investment condos is something we have been doing for more than thirty years for ourselves and our clients. As you may know, there are many books and seminars about investing out there.

However, if you want to speak with me as an investor, simply click here to set up time for a Zoom chat.