Assignment of Contract of Purchase and Sale
Assignment of Purchare and Sale
An Assignment of Sale is simply the assignment of a sales contract that was entered into by two parties at an earlier date.
This is not a transfer of the property itself, but merely a transfer of the right to purchase that property from the original purchaser to a new purchaser.
Assignments of sale are very common during the construction stage of many new developments and allow an original purchaser the opportunity to resell their right to purchase a property before having to complete the sale of that property.
Selling an Assignment
The first step that should be undertaken is to clarify the terms of the original contract that you have entered into in order to confirm the details of your eligibility to assign the contract. In most cases the developer will have some administration fee charges and or other restrictions on when and how an assignment may take place.
Assuming that you are permitted under your contract to assign your original purchase agreement then you may do one of the following:
1. You may find a buyer on your own. In this case you would be responsible for all costs relating to contract preparation, advertising, show of the property, etc.
2. You may hire a licensed real estate company to handle the contracts, showing advertising, etc.
Please be advised that any administration charges and or restrictions that may be in your contract may be enforced regardless of the manner in which you assign your property.
Selling an Assignment of sale can be a complex transaction. It is recommended that you seek independent legal and financial advice.
Buying an Assignment
Buying an Assignment of Sale is quite different than your normal real estate transaction. In this transaction you are actually purchasing a contract from the original owner of that contract and assuming all of their rights and obligations.
Here is an example of how Assignment of Sale might work:
Original Purchase Price:$250,000
(as agreed upon in the original Contract of Purchase & Sale)
New Purchase Price: $295,000
(as agreed upon by the original owner and the new owner)
Difference /Assignment Fee: $45,000
(paid to the original owner of the Contract of Purchase & Sale)
Once the Assignment Fee is paid from the new owner to the old owner that new owner is then obligated to pay the original purchase price of the property as per the terms of the original Purchase and Sale Agreement to the developer.
Naturally an Assignment of Sale contract is not a simple as the example shown above. It is important that both the Assignor (original owner) and the Assignee (the new owner) seek professional advice to ensure their individual concerns are taken care of.
For more information on assigning contracts please contact: