High risk assignment - Need advice! - Posted by Guy C.

Posted by Herbster on October 09, 2009 at 22:34:52:

I agree, put your tail between your legs and run away.

High risk assignment - Need advice! - Posted by Guy C.

Posted by Guy C. on October 08, 2009 at 11:04:16:

Hello everyone,

I hope you can lend me some of your experience on a purchase I want to make (I am from Ontario, just FYI). I am looking to buy an assignment for a pre-construction condo that should occupy in 4 months, and close (estimate) in 8 months.

The builder does not allow assignments (at least they dont approve them).

What the seller is offering me is to add my name to the Purchase and Sale agreement at the builders office. And he will also sign an assignment agreement between us (but not builder).

In return he wants his deposit and 50% of the profit, with the remaining 50% when I close on the unit.

Can someone help answer these few questions for me?

  1. What does adding my name to the P&S contract give me legally speaking?
  2. With my name on the P&S will I be able to take title upon closing or will the original person have to close and then resell to me?
  3. Would you advise against such a transaction because of a lack of consent from the builder?

My biggest concern is that I give up $100,000, then the seller leaves the country (theoretical risk), and I would be stuck with nothing. In such a case would I have rights to the unit as my name is on the P&S and I have an assignment agreement?

Thank you very much for your help, this deal could close as soon as this/next week!

  • Gene

Re: High risk assignment - Need advice! - Posted by wpage

Posted by wpage on October 11, 2009 at 11:36:54:

Gene Why in the world would you want to pay him half of his profit up front? He then has his money out and nothing to lose. Aside from the fact, how do you know what the profit will be when everything is finalized. There is no guarantee that you will make money. The seller is basically trying to do a flip without ever buying the condo himself. He is speculating with your money. Partnering with someone whom you don’t know is risky business. I would never put up $100,000. unless the money went directly to the builder to be sure you will get the condo. Even then you had better be sure the builder is solid.

Re: High risk assignment - Need advice! - Posted by Brian_Wa

Posted by Brian_Wa on October 08, 2009 at 12:41:09:

Don’t do it dude. Be very careful man. It’s not worth it. You probably can buy a better unit within the same development or somewhere near by for a lot less. Don’t be a fool man. $100k is a lot of money to be messing around with. DON’T DO IT!


Re: High risk assignment - Need advice! - Posted by Ken

Posted by Ken on October 08, 2009 at 12:40:06:

No way would I do this.Call the builder and see what is available to buy directly from him.I bet the guy you are dealing with will not be able to close without you and that unit may be available soon