Condo Assignment – Greater Vancouver

June 22, 2008

Condo assignment is challenging for investors who do not wish to complete their pre-sale contracts. Some of these contracts were signed one or 2 years ago as presale condos, and the contracts are now due for completion. Some investors may encounter problems in getting bank financing for their purchases, while others have no plan to complete and take possession of their condos.

A MLS search and analysis of the past 90 days Richmond listing and sale data reviewed that concrete high-rise 2 bedroom 2-bath condos less than 2 years old with 803 to 956 sq ft living area were selling between $370,000 to $468,000. Most units that sold were around the $420,000 price range, and this translated into selling price around $477 per sq ft inclusive of GST. Click here for resale  condos around Richmond City center area.

Ocean Walk

Cutting Losses – Contract Assignments

There are increasingly more assignment calls and activities from investors who want to unload their units. During the past one year or so, many Richmond pre-sale buyers were reported to be paying $480 to $500 or more per sq ft for their units. These investors could be buying their presale 2 bedroom condos between $422,000 to $440,000 not including GST.

With slower sale, softer market condition and more inventory, new condos are expected to take a longer time to sell. Investors who wanted to sell their condos will have to price their units competitively to attract the interest of home buyers. The assignments of some of these presale contracts are already rumored to result in losses to the investors . For those who are not able to assign their contracts, they may end up losing the down payment they paid to the developers.

Dealing With Assignment Problems

Condo assignment is complicated by the fact that an investor has no title to the property as yet. Hence, he or she may not be able or allowed to list the property on the Multiple Listing System (MLS). Without MLS exposure, selling an assignment contract become a big problem for an investor. Some developers do not allow assignment, while others when the consents are given, place many restrictions on contract assignments and often restrict advertising and listing on the MLS system.

For investors selling their presale condos, the market is now turning to be less favorable compared with a few months ago. There are now more listings of re-sale condos and new condos completing over the coming months. The housing market has slowed down and cautious buyers are taking their time to make their purchase decisions.

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