How to sell an apartment by assignment

Often, when there is a desire to purchase an apartment in a new building, it turns out that in the residential complex of interest, all objects have already been sold by the developer.

But there is an opportunity to buy the same housing from investors who have already purchased square meters in the early stages of construction and are ready to resell them even before the house is put into operation. Such an agreement is called a transfer when selling an apartment, it is organized for the purpose of making a profit, sometimes investors agree to resale due to other circumstances.

What is an assignment in the sale of an apartment

Research lawyers point out, when considering a resale from assignment, that this is a kind of option for buying an apartment in the primary real estate market, which is carried out with the permission of the construction company and under its control. That is, the contract provides for a change of the buyer's side in the contract with the developer. The new buyer, paying money under the contract in favor of the investor, acquires rights only under the main contract concluded with the builder. This type of agreement has its advantages, but there are also risks, since a third party is involved in the procedure.

Sale of apartments with assignment: pluses

First, why the opportunity sell an apartment due to the assignment of rights, buyers are interested in savings. Investors who invest in real estate at the excavation stage often sell it 5-15% cheaper than the developer when the house is put into operation. Other attractive aspects of such an agreement can be noted:

• Minimum risks. Many note that the transfer to an apartment will not lead to long-term construction, since the building is almost ready and will be put into operation in the near future.
• Ready housing. In some cases, it is suggested to buy a house with ready decoration, which will allow you to move into it faster.

Sell ​​an apartment by assignment: mutual benefit and features

When understanding what the sale of an apartment is, one must understand that such an agreement has certain nuances. First of all, its format implies the payment of the entire cost of housing. While many developers offer installments during the construction process. In addition, builders often allow the assignment of housing only on the condition of paying a commission of 1 to 3%, as they also want to receive some income from re-registration of documents. Therefore, first of all, the buyer needs to analyze whether the transfer from the sale of the apartment will actually help him save money. Among other features, the following is emphasized:

• The seller will not be able to make claims. The buyer pays the cost of the property to the investor, but all disputes regarding the quality of the apartment will have to be resolved directly with the developer.
• There is no choice of loan program. If an assignment was executed with a loan agreement under which the investor buys real estate, it will not be possible to choose a lending program. The buyer will have to accept the terms that the investor once chose.

It is also better to refuse the agreement when separate contracts are concluded between the investor and the construction company. The assignment document must be tripartite and signed by all parties involved in the transaction.

How to eliminate risks

When understanding what a consignment sale is, you need to anticipate risks in advance and know ways to minimize them. Practice shows that basically all risks are associated with the dishonesty of one of the parties involved in the agreement. Therefore, to prevent buying, follow the following rules:

• Check the parties for credibility in advance. The more information you gather about the investor and developer, the better. Check the permit documents, ask for time to study the contract of assignment with a lawyer.
• Enter into a contract under a safe investment scheme. The most reliable is the purchase with the help of the Construction Financing Fund. In this case, the possibility of double resale of the same object is excluded, since the process is controlled by the state.

Before selling an apartment with the transfer of rights, check the main agreement between the investor and the developer for the absence of a prohibition on transfer. It is even better to demand the indication of this fact in the contract. Reject the deal if the assignment was earlier, as you may be dealing with a problematic construction.

How to sell an apartment with assignment

The procedure for buying an apartment on the basis of an assignment agreement must be carefully thought out and requires preliminary preparation:

• The developer company must have all the documents for the land and a permit for specialized activities.
• Check whether the developer is keeping the promised construction dates.
• Make sure that the investor did not violate the terms of the contract with the developer.

If these conditions are met, the assignment sale will be as safe and legal as possible.

Checkout

In order for the developer to allow the transfer of rights to the apartment, the buyer must pay 100% of its value. If the funds are not paid in full, the content of the contract includes a clause with the conditions for additional payment of the remaining amount. At this stage, the buyer needs to clarify whether the resale is valid immediately or whether it will take effect later, subject to compliance with all conditions. Further:

• Check whether the object purchased from the bank is considered as collateral. This happens when the investor issues a loan. In this case, the financial institution should be another party to the contract.
• Signature. The sale of an apartment with the transfer of rights is considered valid from the moment the contract is signed by all participating parties. The procedure is carried out only after a full check of all documents and obtaining consent. The validity of the contract is confirmed by a notary who certifies the document.
• Apartment reception. As soon as the house is put into operation, the buyer accepts the apartment according to the act of acceptance and transfer and becomes its full owner.

The contract of assignment is the first document that confirms the right of the new owner, but in addition to it, other papers must be obtained. By the way, if you decide buy a house in Kyiv, we recommend contacting the best luxury real estate agency THE Capita

Documents according to the results of the agreement

When figuring out how to sell an apartment on assignment, before signing the contract, you need to be ready to present personal documents — an identification code, a passport, the consent of your husband or wife. After the transaction, the buyer must receive:

• Notarized transfer agreement, which the investor also receives.
• Certified confirmation of the financial settlement with the investor.
• Certified consent of the developer company to transfer, if this fact is not specified in the contract.
• Act of acceptance and transfer of a new apartment.

On the basis of the listed documents, a certificate of ownership is subsequently drawn up.

Sale by transfer of rights with bank credit

The sale of an apartment from assignment with a bank loan has its own characteristics. In addition to the fact that another party will appear in the contract - the bank, the buyer will not have to pay the entire amount for the apartment, and this is a positive side of such an agreement. Part is paid to the investor, and the rest is repaid within the terms of the loan.

See also: What is self-development and how to legitimize it?

The main disadvantage of such a transaction is that the rights to real estate are transferred to the buyer in accordance with the terms of the bank. In addition, it also happens that the initiator of the assignment is the bank itself. This happens when the investor does not fulfill the terms of the loan agreement.

The transfer process with the bank is the same procedure as the loan with a down payment. However, in the process of conclusion, it is important to ensure that the investor's rights are not violated in the contract, otherwise the court may declare such a transaction invalid in the future. It turns out that the buyer's one-time financial burden is reduced, but the risks of losing the home altogether and getting involved in court proceedings are increasing.

See also: Where is it better to buy an apartment: in a new building or on the secondary market?

Sale of apartments with transfer of rights: tax burden

The amount of tax payments during the resale of an apartment depends on which investment schemes are used by the seller. For example, if the transfer of housing is executed, and not through the Construction Financing Fund, then the buyer does not pay taxes. If a new preliminary contract for the purchase and sale of real estate rights is concluded in the procedure, the buyer pays 1% of the value of the Pension Fund.

As a result, what does it mean to sell an apartment with assignment? This is the transfer of real estate rights from one person to another, but at the same time, third parties may be involved in the contract — the developer, a financial institution, and other parties involved in the agreement. Subscribe to our updates real estate portal and receive the latest publications from the real estate agency THE Capital.