Want to purchase an assignment of contract?
Let me show you how
As you may know purchasing a brand new condo from the developer as a pre-sale is really difficult. You may line up for hours if not days outside a presentation centre and still miss out on an opportunity to purchase. Hey, I understand!!!!! Its frustrating, alot of these units are sold to “VIP buyers” or “insiders”. Another method to buy into these new condo developments is thru Assignment of Contract.
The first place to look for an assignment of contract is thru www.realtor.ca. On realtor.ca all properties marketed are managed by the agent for the seller. Realtors have a duty to go thru all the paperwork to confirm the property details before uploading it to realtor.ca. In my opinion Realtor.ca is one of my go to trusted sources.
A second source to find assignment of contracts can be from kijiji or craiglists. On these platforms you can easily be scammed as these photos can easily be copied from the developers website. If a realtor had posted the ad it should be more reliable.
A third source to find is thru your local realtor, which may have a personal database of assignment of contracts available to purchase. Why do they have this personal database? Because some developers do not allow assignments to be marketed on the MULTIPLE LISTING SERVICE system. So realtors, including the brokerages they work for form exclusive assignment groups to market properties between agents.
Now that we know where to find these assignments, what do you need to look out for as a buyer?
I would read all the developers disclosure statements, floor plans, and site plans to verify all the details of the project and the unit.
The second thing I would look out for is the residency of the seller. Why is this important?? If the seller is a foreigner you could be on the hook for unpaid taxes if you structured you deal incorrectly.
The third thing to consider is where will the assignment moneys be held and when it needs to be paid. Some contracts have it paid directly to the seller, while the safer bet would be to have the deposits paid in a real estate companies trust account or brokerage and monies to be released upon registration at land title office when the project completes.
The forth thing to do is go to the construction site. Is there people working? Is the construction progressing on time. There have been cases recently that the developer has halted construction and cancelled the project entirely. Why do they do that? They do it when it becomes more profitable to flip the land versus completing the project. The last thing I would be aware is the price the assignment is offered at. Is the price desirable and how does it compare to properties that are currently for sale?