How to Assign a Real Estate Contract
Assigning a real estate contract is the core mechanism of wholesale real estate. When you assign, you transfer your rights and obligations under a purchase contract to an end buyer, who then closes directly with the seller. You earn an assignment fee for facilitating the transaction. This guide walks through every step of the process.
Step 1: Get the right contract language
Your purchase contract must allow assignment. Include 'and/or assigns' after your name in the buyer field, or attach an assignment addendum that explicitly grants assignment rights. Without this language, many title companies will not process the assignment. Review your state's standard purchase contract to understand what language is needed.
Step 2: Put the deal under contract
Negotiate with the seller and execute the purchase contract. Set your contract price at a level that leaves room for your assignment fee plus adequate margin for the end buyer. Use your option period (in Texas) or inspection period (in other states) as your disposition window.
Step 3: Find your end buyer
Market the deal to your buyer list using a professional marketing package with comps, photos, repair estimates, and financial analysis. Your asking price is the contract price plus your assignment fee. Buyers evaluate the deal based on the total price, not your fee.
Step 4: Execute the assignment agreement
The assignment of contract is a separate document between you and the end buyer. It specifies: the original contract being assigned, the assignment fee amount, the closing date, and any additional terms. The buyer puts up earnest money (typically equal to or greater than your assignment fee) that is non-refundable after a brief inspection period.
Step 5: Deliver to title and close
Send the original purchase contract and the assignment agreement to the title company. The title company processes the closing with the end buyer and seller. Your assignment fee is disbursed at closing from the buyer's funds. You do not attend the closing in most cases.
Pro tips
- Always confirm with the title company that they handle assignments before opening the file.
- Keep your assignment fee reasonable relative to the deal — a $30K fee on a $120K property raises eyebrows.
- Get your buyer's earnest money before sharing the seller's contact information.
- Have a backup buyer identified before your option period expires.
Bottom line
Assignment is the simplest and most cost-effective way to wholesale. No transactional funding needed, one closing, and your fee is paid at the table. The only downside is transparency — the seller and buyer can see each other's numbers. If that is a concern, consider a double close instead.