Are there benefits of buying a property on assignment sale?
Not many people are familiar with the term assignment sale and even understand how it works. Normally, a real estate sale involves two parties transacting. One party, in this case, is transferring ownership of the property to receive an agreed sum of money.
There is a real estate transaction that involves a sale of property still in a pre-construction phase. This type of sale is referred to as an assignment sale. Here, the property is sold before the construction is completed. You will find such sales mostly in condominium markets, especially during the early development of the property. Since the seller is only selling his Agreement of Purchase because he hasn’t taken possession of the building yet, how can buying on assignment benefit you?
Purchase for Less the Price
One of the perks of buying a property on assignment sale is that you can get it at a very good price. This is because when the building is completed, the price would be higher. You will be getting a brand new condo or apartment at a price that won’t be available when construction is completed.
Buyers Have The Advantage
When the construction is completed most investors want to quickly make their money back even before the buyer takes possession. This makes it easy for you to negotiate because there will be a lot of offers on the table during the pre-construction stage. You will have more choices when work is still in progress, unlike when everything has been completed.
Fixed Agreement of Purchase and Sale
When you buy a real estate property on assignment, you are also bound by the initial agreement of the original purchaser of the property. Nothing in that agreement changes and you should have a lawyer review the contract before purchasing. That’s because the terms you agree to won’t be negotiable after purchase.
Convenient Payment Structure
One of the benefits of buying on assignment is the method of payment. Since work is still in progress, you will only be paying the assignor the amount they have paid to date. The remaining balance will be paid to the builder and can be spread in installments. For instance, in pre-construction condos, buyers are made to pay any deposit between 15% to 20% of the cost of the home and then spread the balance over a couple of years.
Buyer Pays Closing Costs
When buying a condo on assignment sale, the buyer pays the closing costs during the registration of the building with the city. These costs are legal fees, land transfer tax, development levies, utility connection fees, and any other compliance fees.
Customizing Your Home
Finally, one of the benefits you also get from an assignment sale is that you can customize the design of your home or condo unit. This, however, depends on the stage of the construction. You can make changes by contacting the builder and giving them the details.
There are many benefits of buying an assignment sale. You will be getting a brand new home and you can customize it to your style. You also get to buy it at the best price which won’t be available after construction is completed.