How Much Is a Typical Assignment Fee?
The assignment fee is how wholesalers make money. It is the difference between what you have the property under contract for and what your buyer pays for that contract. Understanding typical fee sizes helps you price deals correctly and set realistic income expectations.
The national average
Across the United States, wholesale assignment fees typically range from $5,000 to $20,000 per deal. The median is around $8,000 to $12,000 for single-family residential properties. However, this average hides enormous variation based on market, property type, and deal quality.
Assignment fee ranges by deal size
| Property ARV | Typical Fee Range | Fee as % of ARV |
|---|---|---|
| Under $100K | $2,000 - $5,000 | 2% - 5% |
| $100K - $200K | $5,000 - $10,000 | 3% - 5% |
| $200K - $350K | $8,000 - $18,000 | 3% - 5% |
| $350K - $500K | $12,000 - $25,000 | 3% - 5% |
| $500K+ | $20,000 - $50,000+ | 3% - 6% |
As a rule of thumb, most assignment fees fall between 3% and 5% of the after-repair value. On a $250K ARV property, that is $7,500 to $12,500. This is not a hard rule, just the range where most deals land because the buyer still needs enough margin to profit from their rehab or rental strategy.
How to calculate your assignment fee
Your fee is determined by two numbers: your contract price with the seller and the maximum price your buyer will pay. The gap between them is your fee.
Example:
ARV = $280,000
Repairs = $45,000
Buyer's MAO (70% rule) = $280K × 0.70 − $45K = $151,000
Your contract price = $135,000
Assignment fee = $151,000 − $135,000 = $16,000
The key insight: your fee comes out of the buyer's margin, not the seller's proceeds. The seller gets their agreed price regardless of your fee. The buyer pays your fee on top of the contract price. So a larger fee means less margin for the buyer, which means the buyer must be confident in the ARV and repair numbers you present.
What makes fees bigger or smaller
Factors that increase your fee
- Better negotiation with seller: The lower your contract price, the more room for your fee
- Higher-priced markets: $300K+ ARV properties create larger absolute spreads
- Multiple interested buyers: Competition drives buyer offers up, increasing your fee
- Accurate, professional deal packages: Buyers trust your numbers and offer closer to asking
- Clean title and motivated seller: Easy deals command premium pricing
- Scarcity: If buyers are hungry for deals in a tight market, they accept thinner margins
Factors that shrink your fee
- Overpaying the seller: Less room between contract price and buyer's MAO
- Low-price markets: On a $70K ARV property, even 5% is only $3,500
- Weak buyer demand: Only one interested buyer means they set the price
- Property issues: Title problems, code violations, or structural damage make buyers demand deeper discounts
- Inaccurate analysis: If your ARV is $280K but comps support $250K, experienced buyers will adjust down and your fee shrinks
Setting your fee: art and science
New wholesalers often ask whether they should set their fee first and then find a buyer, or price the deal to the market and take whatever fee results. The answer is the second approach.
Your job is to:
- Get the property under contract at the lowest possible price
- Analyze the deal to determine the true ARV and repairs
- Calculate what buyers should pay based on the numbers
- Market the deal at a price that gives buyers enough margin to be interested
- Take the spread as your fee
If you try to force a $20,000 fee on a deal that only supports $8,000, you will not find a buyer. If you price the deal at market and the spread is $8,000, take it. It is better to close a $8,000 deal than to sit on a $20,000 deal that never closes.
When your fee is "too big"
There is no legal maximum on assignment fees in most states, but practical limits exist. Buyers who see a $30,000 or $40,000 assignment fee on a $200K ARV deal often feel like they are overpaying, even if the numbers work. This is a perception problem, not a math problem.
When your fee exceeds $15,000 to $20,000, consider a double close. In a double close, the buyer does not see your contract price or your fee. They only see their purchase price. This eliminates fee objections and allows you to capture the full spread.
Flat-fee vs percentage-based
Some wholesalers think in flat-fee terms ("I want to make $10K per deal") while others think in percentage terms ("I want 5% of ARV"). Both approaches have merit:
- Flat fee target: Simple, consistent income planning. But it may cause you to overprice cheap deals or underprice expensive ones.
- Percentage-based: Scales with deal size. But on low-ARV deals, 5% might only be $4,000, which may not be worth your time.
In practice, the market sets your fee. You control your contract price and your marketing quality. The fee is whatever falls in between.
Assignment fees and buyer expectations
Experienced cash buyers have a clear mental model for what they are willing to pay. Flippers want to buy at 65-75% of ARV minus repairs. Landlords want to buy at a price that yields 8-12% cash-on-cash return. If your assignment fee pushes the purchase price above these thresholds, buyers will pass.
This is why understanding your buyer's exit strategy matters. A property that works as a rental at your asking price but not as a flip needs to be marketed to landlords, not flippers. The right buyer at the right price produces the best fee for you.
Taxes on assignment fees
Assignment fees are taxable income. As a wholesaler, you typically report this as self-employment income on Schedule C, which means you pay both income tax and self-employment tax (15.3% for Social Security and Medicare).
At a 25% marginal tax rate plus 15.3% SE tax, your effective tax rate on assignment income is around 35-40%. On a $10,000 fee, expect to owe $3,500 to $4,000 in taxes. Set aside at least 30% of every fee for taxes.
This is general information about tax treatment of assignment income, not tax advice. Consult a CPA or tax professional for advice specific to your situation.
Bottom line
Typical assignment fees range from $5,000 to $20,000 per deal, averaging around $8,000 to $12,000 nationally. Your fee is determined by the spread between your contract price and what the market will bear. Focus on accurate deal analysis, strong negotiation, and a deep buyer list to maximize your per-deal profit.