Selling your condo before you actually move in… Not that simple!
Here’s what you need to know as a seller trying to sell or back in the day called “flip” your condo.
Firstly remember you don’t own the condo yet, and it is called an Assignment. There are 3 parties involved in this deal: Assignor/seller, Assignee/buyer and the Developers, remember they own the actual unit and the parking spot and your locker. The best way to explain this is when you lease a car there is a lessor , a lessee and the financial lender. You don’t own anything.
The most important step is to ensure that the developer allows you to assign the agreement/condo and their assignment fees. I have seen fees from $3500 to $100,000, so read your agreement when you sign it .The purchase agreements are usually as thick as books but they are the most important documents that will determine what you can do with the condo in the future.
Here is usually who pays what:
Assignor/Seller
- Assignment fee
- Real estate fees for listing the property (5%)
- HST
Assignee/Buyer
- All closing costs from builders
Now remember the seller has already put probably 15-20% cash down as a deposit and needs to get that from the buyer as the developers do not pay that back at any cost. That means the buyer has to have that kind of $$$$$ available for a deposit instead of the usual $5-20K deposit for signing a real estate deal. The deposit goes directly to the seller.
When will the place be registered?
Registration is the time when you actually start your mortgage and transfer all funds to close the deal. The time the ownership is transferred from the developer to the buyer.
Before the actual closing there is a time known as the “occupancy period”, this is when the unit is under your care but you don’t own it, yet you can live there for a fee(like rent).Depending on the buyer ‘s closing date , either the seller or the buyer may have to pay.
Obviously there are quite a few more details and fees that are involved for both parties but these are the main ones, but that’s what real estate agents are for.
I just wanted to give you a heads up on what to expect.
Related Post:
The Advantage Of Buyer Representation For New Construction Condo
