What is an Assignment?
A Condo Assignment is a legal sales transaction whereby the Original Purchaser (the “Assignor”) of a property sells, and thereby transfers, their interest and obligations under the original contract to a new Purchaser (the “Assignee”). This Condo Assignment takes place during or before interim occupancy or before final registration. The “Assignee” will assume all of the “Assignor’s” duties and obligations under the original Purchase & Sale Agreement. These rights and obligations are stated in the original Purchase & Sale Agreement and include terms such as payments of mortgage, taxes and maintenance fees during interim occupancy. Upon Completion, the “Assignee” is granted the Title to the real property and will incur all final closing costs.
An Assignment fee may be charged by the Developer and is normally a cost borne by the “Assignor” (the Original Purchaser). This fee is usually $3000-$5000.
Original Buyer Purchased Condo for $300,000 Paid 20% Deposit = $60,000
New Sale Price: $330,000 New Market Value $350,000
NEW Buyer Requires: 20% deposit - $60,000 and $30,000 for Difference Between Old and New Sale Price
Total Cash Required: $60K + $30K = $90,000
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.