Here's your homework 'assignment' for this month

This generation of new-home buyers is reassessing an outdated homebuying blueprint, and considering unique alternatives when it comes to entering the housing market. In previous columns, I’ve talked about creative ways to come up with an auxiliary income, like dividing a larger house into smaller units, or adding an additional dwelling or a lane house on an existing property. I’ve also explored the need to revise rules and regulations as it relates to down payments and amortization.

Another possibility to consider is an Assignment. As it relates to real estate, the assignee assumes the rights and obligations of a property from an assignor. This Assignment, or re-assignment, of a property can happen before the original purchaser takes possession. As a result, an Assignment can provide a way to profit from a real estate transaction, before you’ve become the owner of the property.

AGREEMENTS OF PURCHASE AND SALE

With ever-climbing housing prices, combined with financial stresses, along with the uncertainty that was generated as a result of the pandemic, select condominium buyers may be reconsidering their acquisition. Depending upon their strategy, some purchasers might have always intended to exercise a plan to assign their Agreements of Purchase and Sale (APS) to a third party. Others, who had planned to lease, or reside in, their condo may also be looking at assigning their APS.

In some cases, a builder will promote this as an added bonus, or a fee may be charged. Stipulations would be outlined in the APS. If a purchaser wanted to exercise this option, they would need written permission from the builder, and it might depend upon the stage of construction. If the building is close to completion, the likelihood of the builder agreeing is much higher.

As with all real estate transactions, I recommend that you find a good real estate agent. An Assignment offers you options, and with the right representation this amendment should be included in your agreement so that you have a choice at the time of closing. There are also realtor platforms approved by builders that enhance the visibility of Assignments, such as AssignMate (onrios.com/assignmate).

None of us can predict what the future holds. That’s why it’s so important to ensure that your investment is protected, and that safeguards are in place to do so.

Assignment benefits

• Assignments can be a lifesaver when a purchaser finds themselves in an unforeseen situation, such as a job loss, unexpected expenditures or the need to move to larger unit as a result of a growing family. On the rare occasion when the purchaser has passed away, it may be necessary to plug into a life insurance program.
• In especially difficult circumstances, an Assignment might be your only option to ensure that you don’t lose your investment. And, quite possibly, benefit on a financial level.
• For those who can’t, or don’t want to, qualify for a mortgage, an Assignment is a great way to invest as you don’t have to close on the unit, or transfer the title.
• You can avoid dealing with tenants, while capitalizing on a real estate investment.
• You can also capitalize on real estate inflation, without having to pay a mortgage, maintenance fees or utilities.
• Assignments also provide purchasers with an opportunity to acquire in-demand floorplans.
• Despite their financial uncertainty, younger homebuyers are investing in Assignments within emerging neighborhoods to seize potential price advantages and potentially leverage any transferable perks associated with the Assignment acquisition.