Assignment Fee
Wholesaling & Deal SourcingAn assignment fee is the profit a real estate wholesaler earns by assigning their purchase contract to an end buyer — typically a fix-and-flipper or buy-and-hold investor. The wholesaler never buys the property; they control it through a contract and sell that contractual right to someone who will close. The assignment fee is the spread between what the wholesaler contracted with the seller and what the end buyer pays.
How it works. The wholesaler negotiates a purchase contract with a motivated seller at a below-market price — say, $100,000 on a house worth $200,000 after repairs. The wholesaler then markets the contract to their buyers list. A rehabber agrees to buy the property for $115,000. At closing, the wholesaler assigns the contract to the rehabber, the rehabber pays $115,000 to escrow, the seller gets their $100,000, and the wholesaler collects the $15,000 assignment fee.
| Line item | Amount |
|---|---|
| Wholesaler’s contract price with seller | $100,000 |
| Property ARV | $200,000 |
| Estimated repairs (end buyer’s cost) | $40,000 |
| Assignment price to end buyer | $115,000 |
| Wholesaler’s assignment fee | $15,000 |
| End buyer’s all-in (purchase + repairs) | $155,000 |
| End buyer’s spread to ARV | $45,000 |
Assignment fees are legal in most US states but face restrictions in some. Know your state’s laws. Also: the contract must contain an assignment clause — you cannot assign a standard purchase agreement that lacks one. Use purchase agreements written for wholesaling, and work with a closing agent who handles assignments regularly.
For the legal and contractual details, see wholesale contract assignment fee. For the full business model, see how wholesaling works.