That’s what I keep telling people who have purchased in pre-construction, with a 2016 closing date, who come to me looking to sell their “condo.”
You don’t own a condo. It’s that simple. You own a piece of paper, which I believe is actually a liability, but that’s another story.
So if you want to sell your piece of paper or “assign” it to another buyer, how do you do it? Honestly, I have no idea. I don’t know who is buying assignments, or why they’d buy from you when they can buy at the sales centre. Let me explain…
$700 per square foot.
That’s what somebody paid in pre-construction, and they’re looking to make money by selling the condo that won’t be ready for three years.
No problem right? Just get a cool $900/sqft when the building is done, and Bob’s yer uncle. That should cover all your costs, and put some money in your pocket.
Wait – you don’t think the market for this standard, cookie-cutter condo that you paid 120% of fair market value for through the developer will end up increasing another $200/sqft? Well, you can just sell your magical piece of paper, or “assign” it, right?
Well, with assignment fees through the developer, commissions, legal fees, and some sort of “incentive” to the new buyer or assignee, you’re going to come out with a loss – assuming you can actually find a buyer, since the developer prohibits you from marketing the magical piece of paper on MLS.
Don’t want to take a loss?
Then I don’t know what to tell you.
In any market, pigs get slaughtered. And I’m seeing more and more people who have put down 5-10% on a pre-construction condo, with another 15-20% due in the next year, who don’t have the funds. These folks are in big trouble.
It’s the real estate equivalent of a “margin call,” is it not?