Tips for Navigating an Assignment Sale

An assignment sale in real estate allows the original buyer of a pre-construction property to sell their rights to the unit before construction is completed. While potentially strategic, it is a complex transaction with legal nuances. Before starting an assignment sale, make sure to understand all the related aspects.

1. Understand the Assignment Agreement

• The assignment agreement details the terms under which the original buyer (assignor) can transfer their purchase rights to a new buyer (assignee).
  • Familiarize yourself with:
    • Assignment fees
    • Conditions
    • Restrictions set by the developer

Tip: Have a real estate lawyer review the agreement to ensure you fully understand your rights and obligations.

2. Check Developer Policies

• Not all developers allow assignment sales, and those who do may impose specific conditions.
  • You may need written approval or have to pay fees.

Tip: Contact the developer early to confirm their policies and ensure they align with your plans.

3. Evaluate Market Conditions

• The success of an assignment sale often depends on current market conditions.
  • Assess the demand for similar properties and market trends.
  • Work with a real estate agent experienced in assignment sales to:
    • Gauge market conditions
    • Set a realistic list price
    • Find the right buyer

4. Price Strategically

• When pricing an assignment sale, consider:
  • The original purchase price
  • Any premiums paid
  • The current market value
  • The cost of completing the transaction
  • Legal fees and the developer’s assignment fee

Tip: Your goal is to attract buyers while ensuring a fair return on investment.

5. Market Effectively

• Effective marketing is crucial to reach potential buyers:
  • Highlight the property’s key benefits (location, design, potential for appreciation).
  • Use professional photos and detailed descriptions to boost desirability.

Tip: Use multiple traditional and online marketing channels for broader exposure. A real estate agent with experience in assignment sales can help.

6. Be Transparent with Potential Buyers

• Provide all relevant information about the property and the assignment process, including:
  • Timelines
  • Costs
  • Conditions

Tip: Create a comprehensive information package, including:

• The original purchase agreement
• The assignment agreement
• Details about the development and the unit

Transparency builds trust and facilitates smoother transactions.

7. Conduct Due Diligence

• Ensure all legal and financial aspects of the assignment sale are addressed:
  • Obtain necessary approvals
  • Manage any outstanding payments
  • Ensure all documentation is in order

Tip: Consult a real estate lawyer and a financial advisor for guidance on the legal and financial complexities.

8. Watch Timelines

• Assignment sales often have strict deadlines set by the developer and the original contract.

Tip: Coordinate closely with all parties involved to avoid delays or penalties. Keep a detailed timeline and checklist to track key dates and tasks.

Final Thoughts

By navigating the assignment sale with careful planning and professional guidance, you can maximize your return and complete the transaction smoothly.