Buying an Assignment
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.
Example:
Original Purchaser buys a condo from the Developer in 2005 for $500,000 with a total down payment of 20% paid to date ($100,000), completion is scheduled for 2007.
In 2006 the original purchaser re-sells "assigns" the property to another party for a sale price of $550,000.
To purchase the assignment the new buyer must pay the following in order to assume the assignment contract:
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Original Deposit =
|
$100,000 |
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Plus:
|
|
|
Difference in Assignment Price from Original Price = |
$50,000 |
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Total Deposit/Cost today to Purchase Assignment =
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$150,000 |
|
In 2006 when property is complete and ready to occupy:
|
|
|
Original Sale Price = |
$500,000 |
|
Original Deposit Paid = |
($100,000) |
|
Funds required to Complete Sale in 2007 |
$400,000 |