10 May
2012
Condo assignments are a hot commodity these days! With a lot of new condo construction in Toronto many investors are looking to sell, consolidate, unload, etc. for multitudes of reasons.
First what is a Condo Assignment? - A condo assignment is where the original purchaser sells or "assigns" his/her rights to purchase the condo unit to a new Buyer. Their assigning their builder's contract.
Who should Buy a Condo Assignment? - Anybody with sufficient savings or a good line of credit. Parents helping their son or daughter as first time buyers. Baby-boomers downsizing. Investors looking to hold and lease the Condo unit. Professionals that don't want the responsibilities of maintaining a house or who travel often.
Assignments are usually not for FIRST TIME BUYERS! You need sufficient cash reserves to buy one.
Top 3 benefits of buying a Condo Assignment?
- Primary benefit is you purchase a Condo unit for thousands below market value, whereas in resale you pay Market Value!
- Secondly, your money isn't tied up for years in a pre-construction condo purchase.
- Thirdly, a short closing, convenience and luxury of buying brand new and you often pay lower maintenance fees than resale condos.
Why do people Assign/ Sell their Condo? A few reasons are:
- They want to save on inconvenience of closing and the additional costs associated with it.
- They need the money for other investments.
- Their circumstances have changed and they no longer can hold on to the investment. Might be moving.
- They can't come up with closing costs so they need to Sell!
What is involved in Buying a Condo Assignment?
- First you need to pay the "original buyers" deposit money they have already given to the builder. That can be 10 to 25% of the original purchase price.
- Second- you have to pay the difference between what you and the original buyer agree to as the new purchase price.
- Thirdly - you have to be Mortgage Approved by the bank for the original purchase price.
Example. Original Buyer Purchased Condo for $300,000 Paid 20% Deposit = $60,000
New Sale Price: $320,000 New Market Value $340,000
NEW Buyer Requires: 20% deposit. $60,000 and $20,000 for New Sale Price
Total: $60K + $20K = $80,000
New Buyer must also be
Mortgage Approved for
$240,000 ($300,000 - $60,000 deposit)
A mortgage approval (commitment) is required not a pre-approval.
If you are looking to buy an assignment. Contact Jas Jagpal with your requirements and for his list of assignments.
If you are looking to sell. We need. 1. First page of contract. 2. Assignment Clause. 3. Floor plan. 4. New Sale Price. Our commission is a minimum of 2.5%.
Once again: Contact Jas Jagpal, BROKER jasjagpal@gmail.com or 905.471.0002 if you need more information to buy or sell an assignment.
Buyers - Let us know what your needs are. How much deposit you have. What you are mortgage approved for.
Sellers - Send us a copy of your assignment agreement & contract with floor plan. Plus any other relevant selling information.
Jas Jagpal, Broker at RE/MAX Dynasty Realty Inc. He has formed 2 teams. One specializing in Investing, primarily in condos and the second helping clients sell their houses in the GTA. No matter what your needs are, contact him if you are looking to buy, sell or invest in the Greater Toronto Area.
Choose Results, Honesty & integrity. Choose Team Jas Jagpal. E: jasjagpal@gmail.com O:905.471.0002
Personal Assistant: Jess jessjagpal@gmail.com
