The assignment fee is what a wholesaler earns for finding a deal, negotiating it under contract, and assigning the contract to an end buyer. It is not added on top of the deal's economics — it comes out of the spread between the seller's contract price and the maximum the end buyer can pay (the MAO). A fee that fits inside a real spread closes; a fee pasted onto an overpriced contract does not, because buyers run the same math.
The formula / structureAssignment Fee = End Buyer's Price − Seller's Contract Price (and it must fit under the MAO)
Assignment Fee: a worked example
Worked example. MAO $114,000 (from ARV $220,000 and repairs $40,000). Seller contracts at $99,000. The wholesaler assigns at $112,000 — leaving the buyer $2,000 of headroom under MAO to make the deal easy to say yes to — and earns a $13,000 fee, disclosed on the settlement statement.
What affects Assignment Fee
- The size of the real spread (ARV minus repairs minus MAO math)
- Deal quality and documentation (comps and scope provided)
- Speed and certainty offered to the buyer
- Market demand for that property type and area
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