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02/17 - Buying

Selling Your Condo on Assignment?

Is planning to assign a pre-construction condo purchase a wise investment strategy?

When considering making a pre-construction condo investment, many realtors and so-called “experts” will advise that selling your condo on Assignment is a no-brainer way to make a tidy profit.

An Assignment Sale is when you sell your Agreement or “assign” your contractual rights and obligations to the developer that has not yet registered with the city. Essentially, you sell your paper contract to a new buyer – the Assignee.

Given how hot the Toronto Real Estate market is, many inexperienced agents (and buyers, for that matter) postulate that you can easily “Assign” your contract to another party – making an ample financial return by simply moving paper around! Ah, if only life were that easy!!

There is no doubt that there is money to be made in investing in pre-construction condos in Toronto. And some investors may have profited by selling on Assignment. However, it is not a get-rich-quick scheme as many hope, and we would caution anyone approaching their pre-construction acquisition with this notion.


As both brokers and investors, we at Fox Marin do not personally invest or recommend anyone purchase pre-construction with the intent to assign as an exit strategy. It is nice to have the option, and sometimes things can work out well for an investor to Assign. However, even in the best of circumstances, the purchaser generally leaves money on the table.

What do many investors and agents misunderstand?

If you have the “right” to Assign built into your Agreement of Purchase and Sale, there is also small print built into the same Agreement that stipulates the following;

1/ No Advertising of Assignments Permitted:
You cannot advertise your assignment sale on MLS or other public platforms. In turn, it can make it very challenging to market your Assignment to find another buyer, wouldn’t you say?

2/ Developer Approval:
The developer can withhold consent to Assign your contract at any time, for any reason (and often will). So it’s not a guarantee or a fundamental right; it’s only a potential option. An Assignment is nothing that you can bank on as a home run.

3/ You’re Still on the Hook:
Even if the stars align, you are fortunate to find a buyer, agree on terms & price and the developer consents? The purchaser (Assignor) is still liable if, for some reason, the new purchaser (the Assignee) cannot close on the property at final occupancy.

4/ Return on Investment:
In our experience, in most instances, the big profits are generated after close and not before. You’ll see more bang for your buck if you sell the property after closing as a residential resale transaction. If the Listing Agent is doing their job, the suite will be staged, styled, marketed to a broad audience, and sold in short order for maximum returns!

Buyers and agents shy away from assignments because they are complicated and jam-packed with loopholes and tons of paperwork. They are 100% doable, and we at Fox Marin have been involved in many of these transactions. However, from decades in this business, we can say it’s not the wisest game to play! And, it’s certainly not a get-rich-quick scheme!

To Summarize:

We would only recommend anyone buying pre-construction or investing in the Toronto Real estate market to view the purchase as a long-term hold. The existence of an Assignment clause is “nice to have” as a potential option in the future, but it is not a viable investment strategy and is certainly not a guarantee!

If you have additional questions about assignments, pre-construction or real estate investing, drop us a line or send us a note – we’re happy to chat any time!

Contact Us (We’re Nice).

This article was written by Ralph Fox, Broker of Record and Managing Partner here at Fox Marin Associates. Ralph is a Torontonian native who recognized from an early age that the most successful people in life apply long-term thinking to their investments, relationships, and life goals. It’s this philosophy, along with his lifelong entrepreneurial drive and exceptional business instincts, that help to establish Ralph as a top agent in the real estate market in downtown Toronto.