Real Estate

Assignment sale process

  • Last Updated:
  • Jul 2nd, 2020 3:26 pm
[OP]
Newbie
Jul 1, 2020
3 posts
1 upvote

Assignment sale process

We bought a pre-construction home from a builder in GTA. Closing is Dec/Jan. I got financing approved based on my income, no issues with my employment or income. However we were counting on my wife’s income to make the new home budget work. Unfortunately with COVID her small business revenue has dried up and looking like it won’t return to normal until next summer/fall (catering service).

We can make the budget work through savings for a year but want to consider all options including possibility of assignment sale so we don’t have to take possession of the property (may want things to settle down with finances before taking on a larger mortgage and new home expenses). We already have a primary home on the west end and could continue staying where we are.

What is the process involved with an assignment sale, any specific costs other than realtor/lawyer fees? I checked my purchase agreement and no mention of an assignment clause but I was planning to call the builder to enquire or shall I ask my lawyer to contact them?

Any tips or suggestions on how to look into this or how to position to the builder so they don’t refuse? We will likely continue with the plan as hopeful business revenues will return but want to know our options. Thank you.
Last edited by throwawayRFD2 on Jul 2nd, 2020 9:34 am, edited 2 times in total.
5 replies
Deal Addict
Jan 5, 2020
1020 posts
1459 upvotes
I don't have any advice for assignment sales but I think you should really try to keep the property if this was suppose to be your primary home.

There is a lot of time between now and December. Maybe your wife can find another job.
[OP]
Newbie
Jul 1, 2020
3 posts
1 upvote
Covid has done a real number on the business. Optimistic customers will return but right now lots of cancellations and 2021 will be a catch up year so don’t expect business to be able to pay too much of a salary. Thankfully we are in a good position overall with cash savings and can manage but want to be aware of all options. Not sure if we are too late for assignment sale if closing in December.
Deal Addict
Nov 22, 2004
1545 posts
642 upvotes
throwawayRFD2 wrote: We bought a pre-construction home from a builder in GTA. Closing is Dec/Jan. I got financing approved based on my income, no issues with my employment or income. However we were counting on my wife’s income to make the new home budget work. Unfortunately with COVID her small business revenue has dried up and looking like it won’t return to normal until next summer/fall (catering service).

We can make the budget work through savings for a year but want to consider all options including possibility of assignment sale so we don’t have to take possession of the property (may want things to settle down with finances before taking on a larger mortgage and new home expenses). We already have a primary home on the west end and could continue staying where we are.

What is the process involved with an assignment sale, any specific costs other than realtor/lawyer fees? I checked my purchase agreement and no mention of an assignment clause but I was planning to call the builder to enquire or shall I ask my lawyer to contact them?

Any tips or suggestions on how to look into this or how to position to the builder so they don’t refuse? We will likely continue with the plan as hopeful business revenues will return but want to know our options. Thank you.
Talk to the builder directly and just ask them about your options citing the uncertainty revolving around covid. First and foremost, you'd need to find out if they allow assignment sales and how flexible they are with them. Some may not allow at all, others might allow but only if you find your own buyer (i.e. not advertise it anywhere), others might be okay with you advertising to find a buyer. Legal fees can vary from $500~$5,000 (also depends on the builder). Alternatively, the builder might consider extending the closing date so you can be better financially prepared.
Realtor @ Royal LePage Ignite Realty
Deal Fanatic
Mar 27, 2004
7320 posts
5288 upvotes
Toronto
Call the builder and ask for if they can add an assignment clause. Explain your situation. Low rise tend not to have assignment clauses. but some do. for example, I know Primont at 16 mile creek, they had a 20k$ assignment clause.
Full-time Realtor
[OP]
Newbie
Jul 1, 2020
3 posts
1 upvote
Builder refused to add an assignment sale. We will take possession, see how things go in the first year and decide next year. Thanks everyone. Sure hope COVID subsides or we learn ways to live with it to get the economy back on track. Stay safe.

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