What is The Difference Between Assignment Homes And Pre Construction Homes in Canada ?
In the world of Canadian real estate, terms like “Assignment Homes” and “Pre-Construction Homes” might sound a bit puzzling at first.
What is a Pre-Construction Home?
Picture this: You decide to throw a fantastic dinner party. But before you start cooking, you plan everything out. It includes the menu, the guest list, and even the color scheme.
A pre-construction home is like that dinner party plan. Well, it’s a property that you buy before the builder even starts putting bricks together.
So, when you purchase a pre construction homes in GTA, you are buying a promise from the builder. However, they assure you new home once construction is complete. It’s like ordering a customized pizza and patiently waiting for it to be baked to perfection.
What are Assignment Homes?
Now, let’s add a twist to the story. Moreover, you’ve ordered that customized pizza, but before it arrives, you decide to share it with someone else who also craves pizza perfection. In real estate terms, that sharing is what we call an assignment.
An assignment sale GTA happens when someone initially buys a pre-construction home. And decides they won’t be the ones moving in. On the other hand, instead of canceling the order, they find a new pizza lover to take over the order.
Difference Between Assignment Homes And Pre Construction Homes in Canada
| Criteria | Pre-Construction Homes | Assignment Homes |
| Timing of Purchase | Purchased directly from the builder before construction begins. | Involves taking over the purchase agreement after pre-construction. |
| Ownership Timeline | Original owner, taking possession once construction is complete. | The buyer steps into the shoes of the initial purchaser upon completion. |
| Customization and Selection | Offers customization during the planning phase. | Inherits choices made by the original purchaser, limited customization. |
| Risk and Certainty | Involves more certainty as the buyer knows what they are getting. | Carries some level of risk, relying on the choices of the original buyer. |
| Deposit Structure | It involves a progressive deposit structure. | The buyer may need to pay the original buyer’s deposit and any assignment fees. |
| Negotiation Flexibility | Negotiation is typically between the buyer and the builder. | Involves negotiation between the original buyer and the new buyer, with the builder’s consent. |
| Market Conditions Impact | Less affected by market fluctuations during planning and construction. | Market conditions can influence the resale price set by the original buyer. |
| Financing Considerations | Financing is arranged directly between the buyer and the builder. | A new buyer may need to secure their financing, terms influenced by the original agreement. |
| Builder Approval | The buyer deals directly with the builder without requiring approval from the original buyer. | Builder’s consent is often necessary for the assignment to proceed. |
| Flexibility for Buyers | Ideal for buyers seeking a brand-new property with personalization options. | Suitable for buyers open to inheriting a property in progress with potential cost advantages. |
If you want to know more about what is an assignment sale you can visit our other blog.
