How to calculate your assignment fee

How do you calculate an assignment fee?

You calculate an assignment fee with one subtraction. The assignment fee formula is: assignment fee = the price the buyer pays for the contract − your contract price with the seller.

If you're new to wholesaling, here's what that means in practice. You sign a purchase contract with a homeowner — say for $126,400. You don't buy the house; you find a cash buyer who takes over your contract. That buyer pays $142,150 in total. The seller gets the $126,400 they agreed to, and you get the difference: $15,750. That difference is your assignment fee.

People search this a dozen different ways — how to calculate assignment fee, how do I calculate my assignment fee, how to calculate assignment fee in real estate — but it's the same one subtraction every time. What changes from deal to deal is only the buyer's price.

The subtraction is the easy part. Everything that follows in this guide is about the one number the formula can't give you: what the buyer will actually pay. New to assignment fees? Start with the complete guide to wholesale assignment fees.

What numbers do you need before you calculate?

Before you can calculate an assignment fee properly, you need five numbers about the deal:

• Your contract price — what you agreed to pay the seller.
• The after-repair value (ARV) — what the house will sell for once it's fully fixed up.
• The repairs — what it will really cost to get the house to that condition.
• The buyer's other costs — buying, holding and selling costs (explained below).
• The profit buyers near you accept — how much a buyer needs to keep for the deal to be worth their money, time and risk.

Most beginners only have the first one clearly — the contract price — and guess the rest. Every guess flows straight into your fee. Get these five right and the calculation takes minutes; get one wrong and no formula can save the number.

How to calculate a wholesale assignment fee in 7 steps

Here’s how to calculate wholesale assignment fee amounts on any deal. You work the buyer’s math backward from the resale, then check the answer against what investors near you actually paid. Each step shows the sample deal: ARV $300,000, repairs $30,000, your contract $140,000.

1. Write down your contract price.
   What you agreed to pay the seller. Sample: $140,000.
2. Work out what the buyer gets back when they resell.
   ARV minus selling costs. Use 8% of the ARV for agent commissions and closing costs.

   $300,000−8% = $24,000=$276,000
3. Take out the buyer’s profit.
   Divide what they get back by 1 plus the return buyers accept. At 15%, divide by 1.15. The answer is the most the buyer can put in, everything included.

   $276,000÷1.15=$240,000
4. Take out repairs and holding costs.
   Holding = the monthly cost × the months the project takes (about 6 for a medium rehab). Monthly cost is loan interest plus taxes, insurance, utilities and upkeep; on this deal about $3,070, so $18,400.

   $240,000−$30,000−$18,400=$191,600
5. Take out the buyer’s buying costs.
   Buying costs (title, closing, recording) run about 2% of the price, so divide by 1.02 instead of subtracting. Round down to the nearest $100.

   $191,600÷1.02=$187,843→$187,800

   That’s the most a buyer can pay for the contract and still keep 15%.

6. Subtract your contract price.
   That’s your assignment fee.

   $187,800−$140,000=$47,800
7. Check it against what investors here actually paid.
   Work out the share of value your price asks for: (price + repairs) ÷ ARV = ($187,800 + $30,000) ÷ $300,000 = 72.6%. Compare it with recent investor purchases of similar houses near yours. If at least half of them paid that share or more, buyers here support your price. On the sample deal, 5 of 8 did. How to find and compare those purchases: how to determine your assignment fee from real buyer data.

How do you find the ARV?

You find the ARV from comps — recent sales of similar houses near the property that are already fixed up. Look for houses in the same neighborhood, with a similar number of bedrooms and bathrooms and similar square footage, renovated to the level your buyer will renovate to, that sold in the last few months.

Be strict. A beginner's most common ARV mistake is picking the one high sale on the street and ignoring the rest. Buyers will check your comps, and if your ARV is too high, every number after it is too high too — including the price you ask them to pay. On the sample deal below, an ARV $15,000 too high would have overstated the fee by $10,500.

How do you estimate repairs?

You estimate repairs by walking the house and pricing the work room by room and system by system: roof, heating and cooling, plumbing, electrical, kitchen, bathrooms, floors, paint, windows, and anything structural. Use what contractors in your area actually charge, not what you hope it will cost.

Your buyers will do their own estimate. If theirs comes out $25,000 higher than yours, they'll offer $25,000 less — and it will look like they're rejecting your fee when they're really rejecting your repair number. Photos and a short scope of work with your deal help buyers trust your estimate.

What are the buyer's buying, holding and selling costs?

These are the costs a buyer pays on top of the price and the repairs, and beginners leave them out more than anything else:

• Buying costs — closing costs, title and fees when they buy. On the sample deal, about 2% of the price.
• Holding costs — what it costs to own the house while it's being fixed and sold: loan interest, taxes, insurance, utilities. On the sample deal, about $3,070 a month for 6 months — $18,400.
• Selling costs — agent commissions and closing costs when the buyer resells. On the sample deal, 8% of the ARV — $24,000.

Added up, they come to $46,156 on a $300,000 flip. Leave them out and the buyer looks like they're making far more than they are — and your fee looks bigger than any buyer will pay.

What does the buyer pay?

The buyer pays the most they can while still making a profit worth their money, time and risk — and only if enough buyers actually shop at that price. That number is the one input the formula can't give you, and it's where most wholesalers guess: they decide the fee they want and work backward from there.

Guess the buyer's price too low and your fee is too low — the deal sells in minutes, and nothing tells you the buyer would have paid more. Guess it too high and the deal sits while your contract deadline gets closer. Everything else in the calculation is simple.

How do you work out what the buyer will pay?

You work out what the buyer will pay by doing their math for them, backward from the sale:

1. Start with what they'll get back: the ARV minus their selling costs.
2. Take out their profit: if buyers near you accept 15% on everything they put in, divide what they get back by 1.15 — that's the most they can put in.
3. Take out the repairs, holding and buying costs. What's left is the most they can pay for the contract.

Your fee is what's left between that price and your contract price. The profit step is the one to be careful with: it should come from what buyers near you actually accept, not a number you like. See how much profit to leave your cash buyer.

Do your buyers actually pay that?

Your buyers only pay that if they're real buyers who buy at that price. The math tells you what a buyer could pay. It doesn't tell you whether anyone near you actually does.

That comes from what investors in the area have actually bought. When investors buy houses, the purchases are recorded — the price, the date, and often whether they paid cash or bought through a company (an LLC). Those records show what real buyers pay for houses like yours, relative to what those houses are worth. Buyers' own buy boxes — the areas, prices and repair levels they say they want — add to that.

Put the two together and you can count who's still buying as the price goes up. Stop where too few are. See what the maximum assignment fee is.

For every step of finding those purchases and turning them into a price, see how to determine your assignment fee from real buyer data.

A worked example, step by step

Here's the whole calculation on one sample deal: ARV $300,000, under contract for $140,000, repairs $30,000. First, the buyer's side at a fee of $47,800:

Step by step, that's what happened. The buyer will get $276,000 back when they resell. To keep 15% on everything they put in, they can put in at most $240,000. Take out the $30,000 of repairs, $18,400 of holding costs and about 2% in buying costs, and the most they can pay for the contract is about $187,800.

Then the buyers: at $187,800, 145 of the 271 buyers who shop this price range would still buy — just over half. Go higher and the buyer keeps less than 15% and more of them drop out. So on this deal:

Assignment fee = $187,800 − $140,000 = $47,800.

Notice what a guessed $10,000 fee would have done here: the deal would have sold in minutes, and the buyer would have kept $37,800 you could have charged.

What's wrong with most assignment fee calculators?

Most assignment fee calculators stop at the formula and ask you for the one number that matters. Some use the 70% rule — 70% of the ARV minus repairs is what a buyer "should" pay. Others ask you to type in the buyer's profit target yourself. Either way, the buyer's price is an assumption, and none of them check whether real buyers near you pay it.

On this example the 70% rule says $40,000 — $7,800 less than what buyers here will actually pay. On another deal it can just as easily say more than buyers will pay, and the deal sits. A calculator is only as good as the buyer's price inside it. See why the 70% rule doesn't set your fee.

What should a wholesale assignment fee calculator do?

A good wholesale assignment fee calculator should do more than subtract. It should work out the buyer's price from the ARV, repairs and the buyer's real costs; check that price against what investors near the property actually paid; show you how many buyers are still in at each fee; and tell you whether the deal or your buyers set the limit. A calculator that only asks you to type in a profit target or applies 70% is a formula with a nicer screen.

What are the most common calculation mistakes?

The most common assignment fee calculation mistakes all come from wrong inputs, not wrong math:

• A wrong ARV. If the house will really sell for $285,000, not $300,000, the fee on the example deal drops from $47,800 to $37,300. A $15,000 ARV mistake costs $10,500 of fee.
• Wrong repairs. If it really needs $60,000 of work, not $30,000, the fee drops to $18,400.
• Leaving out the buyer's costs. Buying, holding and selling come to $46,156 on the example. Skip them and the math says buyers will pay far more than they will.
• Working backward from the fee you want. Deciding on $15,000 first and fitting the numbers around it isn't a calculation — it's a guess with arithmetic.

More in can an assignment fee be too high?

What if your calculation comes out at $0 or less?

If your calculation comes out at $0 or less, the contract price is higher than what buyers will pay for the house. There's no fee that fixes that — even a $0 fee leaves the buyer without a deal worth buying.

You have three honest options: renegotiate the seller price (explain what the repairs and comps show), double-check your ARV and repairs in case you were too cautious, or walk away before your earnest money is at risk. The fourth option — inflating the ARV to make the numbers work — just moves the problem to your buyer, who will catch it.

Should you calculate your fee before you sign with the seller?

Yes — and it's the habit that separates wholesalers who make money from those who scramble. If you know what buyers will pay before you make your offer, you know exactly how much room is left for your fee at any price you offer the seller. Your maximum allowable offer (MAO) is simply what buyers will pay minus the fee you need.

Calculate after you sign, and you're stuck with whatever room the contract left you. See MAO vs. assignment fee.

How do you calculate your fee without guessing?

You calculate your fee without guessing by getting the buyer's price from data instead of assuming it:

1. Get the deal's numbers right — ARV from real comps, repairs from the actual house, the buyer's buying, holding and selling costs.
2. Look at what investors near you actually paid for houses like this one.
3. Test fees one step at a time — at each one, check the buyer's profit and count who's still buying.
4. Choose a price inside the range that passes both, then subtract: that's your assignment fee.

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