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Purchasing a property by way of an assignment is different from a "typical" real estate sale. In an assignment purchase you are buying the contract from the original purchaser and do not own the property until the unit is physically ready to be occupied.
This will be in the form of an Assignment Contract.
| Development Contracts
The Hudson Assignment and Consent |
Example:
Original Purchaser buys a condo from the Developer in 2004 for $200,000 with a total down payment of 25% paid to date ($50,000), completion is scheduled for 2006.
In 2005 the original purchaser re-sells "assigns" the property to another party for a sale price of $275,000.
To purchase the assignment the new buyer must pay the following in order to assume the assignment contract:
| Original Deposit =
(25% paid to date by Original Purchaser) |
$50,000 |
| Plus: | |
| Difference in Assignment Price from Original Price =
(New Price $275,000 less original Price $200,000) |
$75,000 |
| Total Deposit/Cost today to Purchase Assignment =
(payable to Original Purchaser to take over contract) |
$125,000 |
When the property is ready for occupancy in 2006 the new buyer shall complete the sale with the Vendor (Developer) under the same terms and conditions per the original purchase and sale agreement.
| In 2006 when property is complete and ready to occupy: |
|
| Original Sale Price = | $200,000 |
| Original Deposit Paid = | ($50,000) |
| Funds required to Complete Sale in 2006
(payable to Developer/Vendor) |
$150,000 |
| Therefore the total cost for the property is $275,000 with $125,000 due immediately (payable to Original Purchaser) and $150,000 (payable to the Developer/Vendor) due at completion. |
This is only a guideline for assignments we recommended that you seek independent legal advice and call an independent banking representative for financing information.