An assignment is the transfer of one party's rights under a contract to a different party. In wholesaling, the wholesaler holds a purchase contract with a seller and assigns their position to an end buyer, who steps into the contract and closes directly with the seller at the agreed price; the difference between the contract price and the assignment price is the assignment fee. Assignments require an assignable contract (watch for clauses forbidding it) and are typically disclosed through the title company, with the fee shown on the settlement statement.
The formula / structureEnd Buyer's Price = Contract Price + Assignment Fee
Assignment: a worked example
Worked example. Contract with the seller: $82,000. Assignment fee: $6,000. The end buyer closes at $88,000 total — $82,000 under the original contract plus the $6,000 fee — and both figures appear on the closing paperwork. The seller's proceeds are exactly what their contract promised.
What affects Assignment
- Contract language — an assignment clause or its prohibition controls
- State law — some states regulate assignment marketing and disclosures
- Title company requirements
- End buyer availability within the contract timeline
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