Buying An Assignment
When you purchase an assignment you are buying the contract from the original purchaser, which when the development is complete, gives you the ownership of the new suite. It is always wise to seek legal advice before purchasing an assignment. However, here is a basic example of how it works.In 2007 a buyer puts a 25% down payment of $250,000 on a $1,000,000 suite. The building is scheduled for completion in 2009. However, six months later the original buyer decides they want to sell the suite, so they list it with a realtor with an asking price of $1,200,000. You decide that this suite is the one you want and offer the full asking price. In order to purchase the assignment you will need to pay $450,000 to the seller which includes the original deposit of $250,000 as well as the profit of $200,000. Upon completion of the building in 2009 you are responsible for the remaining $750,000 balance owed to the developer.
It is important to note that this is a very basic example of buying an assignment and it is wise to seek legal advice before purchasing an assignment.