What is an Assignment Sale

An assignment sale is when a property, originally purchased on Pre-sale is re-sold to a new party prior to the completion of the development.

 

In most cases, the original purchaser will not be released from their contractual obligation to close on the property until the new purchaser has completed on the sale and closed on the property.

A typical purchaser of an Assignment Sale could be someone new to the city looking to purchase a new home instead of re-sale or renting, or someone transitioning from renting to purchasing who is not willing or able to wait the one-to-four-year construction timeline for a new home.

 

Many investors consider an Assignment Sale as an early exit opportunity from their Pre-sale investment. Thinking of it as an alternate exit strategy vs. closing on the property and re-selling or retaining the property for a longer period and renting the property as a long-term investment.

 

Depending on which province you are purchasing within and with which developer, not all Agreements of Purchase and Sale (APS) or Purchase Agreements (PA) will allow a provision for assignment sale. In addition, many builders will charge a fee which can be anywhere from a flat amount up to a percentage of the re-sale value for such provision. Each of these cases can often be discussed before signing and the inclusion of the provision would depend on the ideal investment strategy for the purchaser or market conditions within the city, specific area, or product type.

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