What is an Assignment Fee?
An assignment fee is the profit a wholesaler earns when they assign their interest in a purchase contract to an end buyer. The fee is the difference between the wholesaler's contract price with the seller and the price the end buyer pays. If you have a property under contract at $120,000 and assign the contract to a buyer at $135,000, your assignment fee is $15,000.
How the fee is paid
The assignment fee is typically paid at closing through the title company. The end buyer brings funds for the full purchase amount ($135,000 in the example above). The title company pays the seller the contract price ($120,000) and distributes the assignment fee ($15,000) to the wholesaler. The wholesaler never takes title to the property.
Typical fee ranges
Assignment fees vary widely by market, deal size, and deal quality. General ranges: $5,000-$10,000 for smaller deals in secondary markets, $10,000-$25,000 for typical deals in major metros, $25,000-$50,000+ for high-value properties or deals with exceptional margins. The market standard assignment fee is often described as $10,000-$15,000, but experienced wholesalers regularly earn more on deals with strong fundamentals.
Disclosure
In an assignment of contract, the assignment fee is typically visible to all parties (it appears on the closing statement). Some sellers and buyers object to large assignment fees. If transparency is a concern, a double close keeps the two sides of the transaction separate. Some states require specific disclosure of the assignment and fee.
Fee negotiation
Your assignment fee is limited by the spread between the contract price and what buyers will pay. Pricing the deal too high to maximize your fee means fewer buyers and longer disposition time. Pricing too low leaves money on the table. The sweet spot balances your profit with giving the buyer enough margin to make the deal work for their exit strategy.