Key benefits in selling your pre-construction unit before closing include: avoiding closing costs, gaining liquidity and subsequently investing in another pre-construction unit, or simply diversifying your holdings.
Mark purchased a pre-construction condo unit from a real estate developer 3 years ago. The condo is well under construction and will be nearing interim occupancy in the next few months. Mark is looking to sell the pre-construction contract for his condo unit before he has to take possession of it and final closing occurs. He is looking to sell it as an assignment to someone else in the market for a new home.
When it comes to selling a pre-construction unit via assignment, there are many benefits that Mark can take advantage of.
One benefit that Mark can take advantage of is appreciation and the potential for a return on his purchase. Because Mark signed the Agreement of Purchase and Sale for the condo unit 3 years ago, the land that the condo building is being built on is worth more than it was 3 years ago, which now means that Mark’s contract for the unit within the condo has also increased in value, allowing him to sell it for much more then he paid for it, and walking away from the sale earning a profit.
Another benefit that Mark can take advantage of is the ability to sell the contract before interim occupancy and final closing. When interim occupancy and final closing occur within the pre-construction timeline there are usually many extra fees and costs associated at those times that the purchaser must pay as part of the Agreement of Purchase and Sale. By having Mark complete the assignment sale before interim occupancy or final closing occurs, he is potentially saving himself thousands of dollars.
When Mark purchased the pre-construction condo unit 3 years ago, the developer required proof of a mortgage approval from an approved lender to complete the Agreement of Purchase and Sale. The actual mortgage is not needed until Mark receives the title for the physical unit and needs to start making monthly mortgage payments towards it. If Mark can sell his contract before he takes ownership of the unit, he will not have to deal with the process of reapplying for a mortgage he no longer needs or may not even be able to afford any longer.
Investing in real estate is considered to be one of the safest and smartest ways to invest your money. By purchasing this pre-construction condo contract 3 years ago Mark has built up equity pretty much without doing anything. By becoming educated in the real estate market, Mark can take that equity that has built up and receives from the successful sale of the assignment of the condo unit and reinvest it in a new project. Just another benefit of an assignment sale that Mark can take advantage of.
If you are considering selling an assignment condo, it can be very beneficial for you, the assignor. Let one of our Certified Experts here at CondoNow guide you and help you with any questions and concerns you may have regarding this process.
