Reassignment deals in a nutshell

What are reassignments?

A reassignment is an agreement to assume a purchaser's (called the assignor) contract with a builder to close on a condominium before the building is registered. It is frequently done when the assignor has already got occupancy of the unit and in most cases can not advertise the unit on MLS.

Why would I want to purchase in this manner?

Because the assignor can not list on MLS their exposure for the sale is much less than in a normal real estate market. As a result in order to "cash out" sooner the investor usually will sell at a lower than market value price. Ideally reassignments should be a true "win-win" situation.
The investor gets their money back to invest in something new and the buyer gets a below market value unit without all the uncertainties of preconstruction (When the unit will be ready, what it will look like, where their life will be at that time, etc.) More than half of my sales in the last 6 months have been reassignments due to their exceptional values.

Reassigment costs and credits:

The costs in reassignment purchases are the same as when closing a condominium with a builder that was bought preconstruction. The buyer will have to pay: Land transfer tax: (varies based on the price and the buyers status) which is standard for all purchases in Ontario although depending on how the lawyer closes the transaction if the original deal was signed before the municipal tax was introduced you may not get charged the new land transfer tax.

Builder adjustments: which are costs only when closing with a builder. These are outsourcing costs that the builder passes along to the purchaser. The average adjustment cost is $5 000. Lawye's fees are usually $500 more expensive in reassignments as compared to a normal resale transaction as the lawyer needs to do a bit more work

Typical credits are the interest that the assignor would have received on their original deposit to the builder. The interest rate is usually very low but the assignor has usually put down a large deposit for a long time. The assignee (purchaser) would also receive a credit from the government for the difference in GST from the time when the assignor (seller) purchased and the assignee closed with the builder. So if the assignor bought from the builder in 07 they would have paid 7% GST. As it is at 5% now, the assignee would get 5% back. This credit is not given at source. It must be applied for and then recieved by mail. The assignee (purchaser) would also receive any other incentives that the buyer received originally like free maintenance fees or cash back. Generally, most of the credits come close to balancing out with the extra costs so that the closing costs are comparable or less than in resale.

View current reassignments