Assignment Process

Although you may have signed a contract to purchase a property, circumstances may arise that make it difficult to move in or register ownership at a later time. In such situations, the best course of action is to sell the property to a third party, adding up the down payment made and any price difference in the market since the initial purchase. Please refer to the Assignment process below and prepare accordingly without any trial and error.

1. Review the assignment clause at the time of the contract

  • It is advisable to carefully review the assignment clause when initially signing a pre-sale contract. The clause states when assignment is possible, the conditions (construction progress, overall pre-sale status), and the cost of assignment.
  • Most contract assignment clauses specify that even if assignment is possible under various conditions, there must be "approval from the construction company" for assignment to actually occur. In other words, this means that even if all conditions for assignment are met, assignment cannot take place without approval from the construction company. Nowadays, the timing for construction companies to approve assignment is getting later and later, and in some cases, they only approve it when occupancy is very close, so please keep this in mind.

2. Property listing

  • Choose a real estate agent with experience in assignment sales

Assignment sales involve many specialized clauses that need to be included in the offer contract, and there are many interests to represent on the part of the seller and the buyer, which makes it very different from a regular real estate sale. Therefore, it is crucial to select a real estate agent with experience in assignment sales.

  • Difficulty in advertising assignment properties

Assignments cannot be listed on MLS, so it is difficult to reach potential buyers through traditional advertising methods such as newspapers or magazines. Therefore, the pool of potential buyers is quite limited. Therefore, the pool of potential buyers is quite limited.

At MyBestHome, we have a well-established network of realtors throughout Toronto, as well as the ability to share information quickly with our many VIP members over our 17 years of service. By providing timely information to potential buyers, we can help ensure successful assignment sales that benefit both sellers and buyers.

  • Documents needed for property listing

The original purchase agreement and disclosure statement (booklet or USB/CD)
Evidence of compliance (receipts for deposits and any other payments from the builder’s lawyer’s office)
Completed color selection documents
Upgrades and extras order forms, and payment confirmation
Notices from the builder (e.g. regarding the expected move-in date)

3. Offer Negotiation Process

The listing price is determined based on the market value.
For example, if the initial pre-sale price was $500,000 and the buyer has already paid 20% or $100,000, then if the property is sold for $600,000 in the Assignment market, the seller will receive the $100,000 that the buyer has already paid, plus a premium of $100,000 reflecting the difference between the pre-sale and Assignment prices. The seller will receive the total amount of $200,000 on the day when the developer approves the sale, and the buyer will receive the right to transfer the ownership of the property. The buyer will pay the remaining $400,000 at a later date, which may be at the time of occupancy or registration.
It is recommended that the seller’s and buyer’s lawyers be different.
After reviewing each other’s lawyers, it is advisable to include approval conditions such as mortgage approval and developer approval in the Offer.