Assignment Fee in Real Estate: How Wholesalers Price It, Get Paid and Disclose It

In real estate, an assignment fee is what an end buyer pays a wholesaler to take over the wholesaler’s purchase contract with a seller. It equals the gap between the price your buyer agrees to pay and the price in your contract, and it is normally collected through the title or escrow company at closing.

That definition is the easy part. The parts that decide whether you actually get paid are how you price the fee against your buyer’s numbers, how it appears on the settlement statement, whether your contract and your buyer’s financing allow an assignment at all, and whether your state now requires written disclosure before you sign. This guide covers each, with a worked example and the state laws passed since 2024.

Where the fee comes from

A wholesale deal has two agreements. The first is your purchase contract with the seller, which gives you an equitable interest in the property: the right to buy it at the agreed price. The second is an assignment agreement between you and your end buyer, in which the buyer takes over your rights and obligations under the first contract and pays you for that right.

The seller still sells at the price in your contract. The buyer pays that price plus your fee. You never take title, and you never need a mortgage. That is why assignment is the simplest exit in wholesaling, and why the structure of the original contract matters so much. If you are new to the paperwork, start with our walkthrough of how a wholesale real estate contract works.

Is there a typical assignment fee in real estate?

Blogs often quote ranges like $5,000 to $15,000 or a “$2,000 to $7,000 average.” We could not find any published survey or dataset behind those numbers, so treat them as anecdotes. Fees vary with the property’s price, the market, the size of the repair job, and how competitive buyers are. A $9,000 fee can be fat on a $90,000 house in Ohio and thin on a $600,000 house in California.

A better question than “what’s typical” is “what does this deal leave room for?” That answer comes from the end buyer’s math.

Pricing your fee from the buyer’s side

Your end buyer is usually a flipper or a landlord with a maximum price. Your fee lives in the space between that maximum and your contract price. Work backward:

1. Estimate after-repair value from recent, truly comparable sales. Our ARV guide and the ARV calculator walk through the method.
2. Estimate repairs conservatively, with a contingency line.
3. Apply your buyer’s formula. Many flippers start from a percentage of ARV minus repairs; landlords look at rent and cash flow. Ask each buyer which number they use, then check it with the MAO calculator.
4. Subtract your target fee from that maximum. The result is the most you should offer the seller.

Worked example (hypothetical numbers)

A three-bedroom house has an estimated ARV of $250,000 and needs $40,000 of work. Your best flipper buys at 70% of ARV minus repairs, so their maximum is $250,000 × 0.70 − $40,000 = $135,000.

Scenario C is how most first deals actually go: the wholesaler writes a contract above what any buyer will pay and then cuts the fee to save it. The fix happens at the offer stage, not the dispositions stage. See how to write a wholesale offer for how to build that cushion in before you sign.

How you actually get paid

The assignment agreement and deposit

The assignment agreement should name the original contract, the assignee, the fee, the deposit the buyer puts down, and what happens to that deposit if the buyer fails to close. Many wholesalers require a meaningful nonrefundable deposit from the end buyer at signing, deposited with the title company, so the buyer has real money at risk. The original earnest money you gave the seller is usually credited back to you through the assignment.

On the settlement statement

The American Land Title Association publishes model settlement statements (combined, seller, buyer, and cash versions) that title companies use to itemize a closing. None has a dedicated “assignment fee” line. In practice, the title company typically shows the fee as a charge to the buyer and a disbursement to you or your company, often in a miscellaneous section, and pays it from the buyer’s funds at closing. Exactly where it lands varies by company, which is one reason to work with an investor-friendly title company that handles assignments routinely.

Two consequences follow. First, the seller may see the buyer’s total price if they receive a combined statement, so assume your fee will be visible and be comfortable explaining it. Second, the title company needs the signed assignment agreement before closing; send it as soon as it is executed, not the day before.

Contracts and loans that block an assignment

A fee you can’t collect isn’t a fee. Before you sign, check three things:

• The contract’s assignment clause. Some standard forms let the seller decide. Florida’s widely used FAR/BAR “AS IS” contract, for example, has a checkbox where the parties choose whether the buyer may assign and be released, may assign but not be released, or may not assign. If the wrong box is checked, you have no assignable interest.
• Bank-owned and short-sale addenda. Lender addenda commonly prohibit assignment or require the named buyer to close. Read them before you market the deal.
• The end buyer’s financing. FHA’s property flipping rule at 24 CFR 203.37a says the property must be purchased from the owner of record and “the transaction may not involve any sale or assignment of the sales contract.” It also bars FHA financing on a resale within 90 days of the seller’s acquisition. An FHA buyer cannot close on your assignment, and a quick double close won’t fix it either.

Assignment or double close?

A double close means you actually buy the property and resell it, usually the same day, often with transactional funding. It costs more: two sets of closing costs and a funding fee. It is worth it in specific situations:

State laws that now cover assignment fees

Many pages still say wholesaling is unregulated if you aren’t an agent. That is out of date. Since 2024 a wave of states has added disclosure, registration or licensing rules aimed at wholesalers. Most require you to tell the seller in writing that you intend to assign or resell, and many give the seller a window to cancel. The table summarizes laws we verified; follow the source links for exact requirements.

Note what most of these laws do not require: in Pennsylvania, for example, the state REALTORS association says the dollar amount of your fee does not have to be disclosed, only the nature of the transaction. Rules differ by state and keep changing, so check your state wholesaling guide and, in any state on this list, have a local real estate attorney review your contract and disclosure forms before you use them. For the broader picture, see is wholesaling real estate legal.

How the fee is taxed

For anyone wholesaling as a business, assignment fees are generally ordinary income, because property held primarily for sale to customers is not a capital asset under IRS Publication 544. They are reported on Schedule C and are subject to self-employment tax of 15.3%, calculated on 92.35% of net earnings (IRS Topic 554). Don’t count on receiving a 1099 from the title company; report the income either way. Our full guide to wholesale real estate taxes covers estimated payments, deductions and the 2026 figures.

When a bigger fee is the wrong goal

• Your buyers list is short. With one or two buyers, a high fee gives them every reason to walk. A smaller fee that closes beats a large one that expires.
• Repairs are uncertain. Foundation, roof or sewer unknowns make buyers discount hard. Price your fee for the worst case, or get a contractor walkthrough first.
• The seller relationship is fragile. Inherited homes and pre-foreclosures attract scrutiny. In disclosure states the seller may have a cancellation right; a seller who feels misled is likely to use it.
• You are contracting above what any buyer pays. If the only way to make the deal work is a $2,000 fee, the deal was priced wrong. Renegotiate honestly using inspection findings, or let it go.

Over a year, the wholesalers who earn the most usually aren’t the ones with the biggest single fees. They are the ones whose buyers trust every deal they send, which means leaving buyers enough margin to come back.

Assignment fee checklist

1. Confirm the purchase contract allows assignment and has no lender addendum that blocks it.
2. Give any disclosure your state requires, in writing, before the seller signs.
3. Price the fee from your buyer’s maximum, not from a target income.
4. Confirm your end buyer is paying cash or using financing that allows an assigned contract.
5. Sign a written assignment agreement with a deposit and send it to the title company immediately.
6. Review the draft settlement statement for the fee line before closing day.
7. Move your tax share into savings the day the fee is paid.

Negotiating the fee with your end buyer

Most fee disputes happen because the wholesaler announced a number instead of selling a deal. A few habits keep the conversation about the property rather than your profit:

• Lead with the buyer’s numbers. Send the address, your repair estimate, two or three sold comps and the price to them, not your contract price. Experienced buyers decide on their own math.
• Price to a specific buyer. If you know a buyer’s buy box, you can set a price that fits it on the first message instead of discounting later.
• Set the deposit up front. State the nonrefundable deposit and the closing deadline in the first offer, so the fee and the commitment arrive together.
• Know your floor before you send it. Decide the lowest fee you would accept on day one, and the date you would cut to it. Without a floor, every pushback becomes a discount.
• Don’t hide repair problems. A buyer who discovers a cracked foundation at the walkthrough will either cancel or renegotiate your fee to zero. Disclose what you know.

What goes in the assignment agreement

The assignment agreement is a short contract, but it carries your entire payday. Whatever form you use, have a local real estate attorney review it once for your state, and make sure it covers these points:

1. The original purchase contract, identified by date, property address and parties.
2. The assignee’s name exactly as it will appear on the deed.
3. The assignment fee amount and that it is paid at closing through the title company or closing attorney.
4. The assignee’s deposit, where it is held, and whether it is refundable.
5. That the assignee takes on the buyer’s obligations under the original contract, including the closing date.
6. What happens to the deposit if the assignee fails to close.
7. Any disclosures your state requires, such as the equitable-interest disclosure in Tennessee or Maryland.

A second worked example: assignment vs double close costs

These figures are hypothetical. You have a contract at $150,000 and a buyer at $172,000, a $22,000 spread. On an assignment, your cost is mainly your share of title fees, so you keep close to the full spread. On a double close, you pay for two closings: the closing costs on your purchase leg, the closing costs on your sale leg, and a transactional funding fee if you borrow the purchase money for the day.

Get a written estimate of both legs from your title company before you choose. On a large spread with a sensitive seller, the extra cost can be worth it; on a modest fee it usually is not.

Assignment fee questions we hear most

Is an assignment fee the same as a commission?

No. A commission is paid to a licensed agent for representing someone. An assignment fee is payment for transferring your own contract rights as the buyer. That distinction is exactly what several states have tightened, which is why some now require a license or registration if you wholesale repeatedly.

Can a buyer back out after signing the assignment?

They can try, which is why the deposit matters. If the assignment agreement makes the deposit nonrefundable and the buyer walks, the deposit is usually your remedy, and you still have time on the original contract to find another buyer.

Get the whole deal right