When to Assign
Though the logic may seem simple, assignments can sometimes be lengthy and costly processes. We always encourage our clients to take a long-term approach to their investments and usually discourage buying and flipping strategies.
However, we understand that life circumstances and plans change all the time. Below are some of examples of when our clients have chosen to assign the unit to either another family member or another purchaser.
1. Assigning to a child or direct family member
Purchasers will sometimes assign the unit to their family member or child for tax planning or wealth transfer purposes. Furthermore, sometimes adding a family member's name to the unit can help aid the financing process. It's always important to consult your accountant and lawyers when deciding how to optimally distribute the assets among a family to fit your future needs. ​
2. Assigning the unit to another Baytree client
Sometimes, our client's life circumstances puts them in a position where assigning the unit is what's best for the client. Loss of employment, passing of a loved one, and other difficult life events can encourage a client to assign the unit regardless of it's profit potential.
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In these scenarios, we always try to aid the client find a replacement purchaser - if they wish. depending on the progress of the project and market conditions, we will inform both parties of what we consider fair market value of the unit. Ultimately, it will be up to the 2 parties involved to negotiate and decide on a selling price.
3. Assigning the unit to flip it
Though not encouraged by our brokerage, some clients may decide to purchase with the intend of eventually selling the unit on assignment. These purchasers often use secondary market places to find purchasers to assign to.
Assignee vs Assignor
The original purchaser(s) are the assignor(s)
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The new purchaser(s) are the assignee(s)
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Example:
Rachel is the original purchaser who decides to sell her unit on assignment to Tommy. Rachel is the assignor and Tommy is the assignee.
Our Assignment Process
1. Assessing the options
When one of our clients reaches out to assign their unit, the first thing we do is assess the situation as a whole. We will offer our services in the assignment process which most of our clients opt for.
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After deciding who will be the assignee(s), we contact the builder directly on behalf of our clients to start the assignment process.
2. Obtaining Builder Approval
The assignee should be prepared to provide a mortgage approval for the builder. Once the builder has approved the assignment request, they will reach out to us to book an appointment to sign the required documentation.​
3. Signing with the builder
While most signing appointments can be done virtually, there are a handful of builders who still require documents to be signed in person.​
4. Settling of deposits & payment
Based on the market conditions and progress of the project, the assignment price may be less than, equal to or more than the original purchase price. Regardless of the value determined between the assignee and assignor, the builder will still require the original deposit schedule based on the original purchase price.
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Depending on the deposits made and the sale price between the old and new purchasers, the amount owning between the parties is unique to each assignment. Please note the builder does not get involved with these transactions. The builder is only concerned about receiving the original deposit structure from the assignee. ​If future deposits are still required, the assignee should be prepared to pay them.
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Use our quick assignment calculator below to see what will be owing by each party.
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Quick Assignment Calculator
All content on this site is provided for educational purposes only and does not constitute legal, financial, or real estate advice.