Assignments: Risky or Rewarding?

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.

 

 

 

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