Assignment Fee

What is Assignment Fee?

An assignment fee is the payment a real estate wholesaler receives for transferring (assigning) their rights under a purchase contract to an end buyer. When a wholesaler puts a distressed property under contract at a negotiated price and then finds another investor willing to purchase the contract at a higher price, the difference is the assignment fee. This fee represents the wholesaler's compensation for finding the deal, negotiating with the seller, and connecting the property with a buyer.

Typical assignment fees range from $5,000 to $20,000 per deal, though they can be significantly higher on larger or more deeply discounted properties. The fee must be reasonable enough that the end buyer still has sufficient margin to profit from their renovation and resale or rental strategy. If the assignment fee is too large, end buyers will simply find their own deals rather than paying a premium for wholesaler-sourced properties.

The mechanics work as follows: The wholesaler negotiates a purchase contract with the seller at Price A. The contract includes an assignment clause allowing the wholesaler to assign their rights to another party. The wholesaler then markets the deal to their buyers list at Price A + Assignment Fee. When a buyer agrees, the wholesaler signs an assignment of contract, and at closing, the end buyer pays the full amount, with the assignment fee going to the wholesaler and the original contract price going to the seller.

Ugly House Finder helps wholesalers maintain deal flow by providing a consistent pipeline of distressed property leads through AI scanning. The platform's skip trace integration also enables rapid owner contact, reducing the time between property identification and contract execution.

Example

The wholesaler contracted the property at $38,000 and assigned the contract to a fix-and-flip investor for $48,000, earning a $10,000 assignment fee without ever taking ownership of the property.

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