What is an Assignment Sale in Canada?

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An assignment sale is a mortgage clause that allows the buyer of a home to sell the home to another buyer before they close on it.

If you are an individual looking to invest in the condominium industry, you may have heard the term “Assignment sale” tossed around a time or two.

Assignment sales are an excellent opportunity for investors and sellers alike, but they aren’t the typical buy and sell transaction. So here are some things that you should know about Assignment Sales in Canada:

What is an Assignment Sale?

An Assignment sale involves two different parties: An assignor (or buyer of a property) and an Assignee (another buyer that wishes to take over the rights of a property).

An assignment sale occurs when an assignor signs over property rights to the assignee before they (the assignor) have taken possession of the property. 

When an Assignment sale occurs, the assignee takes over rights listed in the Agreement of Purchase and Sale before the property is closed on by the original buyer.

It sounds a little confusing – and it is. As we mentioned, it’s not your typical sale. In fact, the assignor isn’t really even selling the property because they haven’t taken possession yet. Instead, what they’re selling is the rights to the property. 

Why people sell on Assignment

To some, selling on assignment might not make a lot of sense – why would you sell a property before you even own it? But the reality is, many people buy condos before they are even built – sometimes years before they are built.

And lots of things can change in a few years – a new job, children, and so forth. So what worked for a particular buyer at the time of sale might not work once the condo is actually ready. In such a case, they might choose to sell it on assignment. 

Some people also sell on assignment for financial reasons. Some people sell when they can’t close; others sell for profit. 

You can’t market Assignment Sales

In Canada, most Agreements of Purchase from builders state that you cannot market Sales on Assignment. This means that you can assign your contract to someone else if the need arises, but you cannot post it on places like MLS.

If you breach your agreement and advertise anyways, your contract can be canceled, and you can lose your deposit. For this reason, selling on assignment can be difficult. 

You can find buyers through a Real Estate Agent

Most builders will not let you market for assignment sales, so how do you sell? The best bet is to find a Real Estate Agent who specializes in the area of Assignment sales. These agents usually have a list of buyers who are ready and looking to purchase assignments. 

Not only are real estate agents best for making a sale, but they can also help you to navigate through the world of assignment sales. Assignment sales are complicated, and a good agent can help you work through all of the details with no added stress. 

In conclusion, an assignment sale is when a buyer sells a property before the closing date. In most cases, assignment sales are related to condos, but such is not always the case. Assignment sales can be for any property. 

If this is something you’re interested in, it would be best to speak with an assignment realtor about your options. Assignment sales can be complex, so it’s best to have a knowledgeable professional on your side. 

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Kareena Maya is a freelance writer focused on the personal finance and travel spaces. He frequently writes about credit cards, banking, student loans, insurance, travel rewards and more. His work has been featured in publications such as Forbes Advisor, Bankrate, Credit Karma, Finance Buzz, The Ascent and Student Loan Planner.

Kareena Maya is a freelance writer focused on the personal finance and travel spaces. He frequently writes about credit cards, banking, student loans, insurance, travel rewards and more. His work has been featured in publications such as Forbes Advisor, Bankrate, Credit Karma, Finance Buzz, The Ascent and Student Loan Planner.