With all the developments appearing across the lower mainland people are lining up for Pre-Sales. With the rising prices this is a great alternative for people as long as they are willing to wait, most often for years! If you have been one of those people lining up for a Pre-Sale, you know that it’s not easy to just give your money and lock in a unit. That’s why assignments have also become popular, the Seller makes a profit and the Buyer gets into a brand new building. It can be risky or a win-win situation as long as everything is done properly.
Here’s what you need to know about being the Assignor (Seller):
- If the Buyer is unable to complete, the Assignor responsible for completing the transaction.
- Is Assignment of a pre-sale contract permitted under the purchase contract?
- Does the Developer have an Assignment Fee?
Here’s what you need to know about being the Assignee (Buyer):
- Review the Disclosure Statement and associated documents in great detail.
- Will the deposit and “lift” be paid by the assignor?
- If possible, release the money to the assignor only after the building is complete and the title has been transferred.
- If there is a breach in the assignment agreement or pre-sale contract, what happens?
- Did you know most lenders will not hold a rate especially on long completion dates or they will revaluate and potential not reapprove you. RBC is the only bank that will hold your rate until completion.
I recommend you have your real estate agent and lawyer review all the documents thoroughly.