In this installment of the Toronto Condo Assignment series, I want to talk about some assignment advantages from the seller's perspective. It may seem that all the advantages in assignments are owned by the buyer, but this is not true. Some things to consider:
- Get your money back! Let's face it, 20-25% of the average condo in Toronto is a lot of money. If you bought a new condo in the past few years in Toronto, that's the amount in cash you would have had to put down to the developer. Your plans have changed and you want that money for something else. Selling by assignment is a way to get that deposit money back into your hands.
- Avoid occupancy fees. There has been a lot of talk about occupancy fees (or phantom mortgage) lately as horror stories have emerged of some buyers paying fees to the developer for up to 2 years to live in their condo without ever putting a single cent towards the principle on their mortgage. If you have no intention of living in the unit, why pay occupancy fees?
- Avoid closing costs. Closing costs on a new condo can be significantly more than the closing costs on a typical resale. Always consult your lawyer and your accountant for what you can expect in terms of closing costs, especially if you are purchasing a condo that will not be your primary residence. Selling by way of assignment means you pass all these closing costs on to the buyer.
- Take advantage of the market without getting greedy. The market has been great for the past few years. If you were fortunate enough to have bought a pre-sale condo in 2007 or before, then your investment has probably appreciated significantly. For some, selling their contract is a great way to take your profit and move on.
Questions? Leave a comment or contact me.