Who pays the assignment fee?

Who pays the assignment fee?

The end buyer pays the assignment fee. They pay your contract price plus your fee to take over your contract, and the title or escrow company handling the closing pays your fee to you out of the buyer's money. The seller doesn't pay it — they receive the price they agreed to in your contract.

New to assignment fees? Start with the complete guide to wholesale assignment fees.

If you're new, this is the part that confuses most people, so let's walk through it slowly. You never receive a check from the seller, and the buyer doesn't hand you cash in a parking lot. Everything goes through the title company (or escrow company, or closing attorney, depending on your state) — the neutral party that handles the closing. The buyer sends their money to the title company. The title company pays everyone what they're owed from that money: the seller gets the price in your contract, any loans on the house get paid off, the closing costs get paid, and your assignment fee gets paid to you.

So when people say "the buyer pays the assignment fee," they mean the fee comes out of the buyer's money. It's part of what it costs them to buy the house.

How is an assignment fee paid at closing?

An assignment fee is paid at closing by the title or escrow company, from the buyer's funds. You don’t collect it from the buyer yourself. Here’s the process, in order, on the sample deal (contract $140,000, fee $47,800):

1. Sign the assignment agreement with your buyer.
   It names the property, your contract, and your fee: $47,800.
2. Collect the buyer’s deposit into escrow.
   It goes to the title company, not to you. It’s what makes the buyer serious.
3. Send both contracts to the title company.
   Your purchase contract with the seller and the assignment agreement.
4. Review the settlement statement before closing.
   Check your fee line and the seller’s payout. Ask the title company how your state and they show the assignment fee.
5. The buyer wires their funds at closing.
   $187,800: your contract price plus your fee, plus their own closing costs.
6. The title company pays everyone.
   The seller receives $140,000 (less their own costs under the contract). You receive $47,800.

What does the money flow look like at closing?

Here's the same sample deal as a beginner would see it on closing day, step by step:

1. Before closing, the buyer signs your assignment agreement and puts down a deposit, held by the title company.
2. On closing day, the buyer wires $187,800 plus their own closing costs to the title company.
3. The title company pays the seller the $140,000 in your contract, minus whatever closing costs your contract says the seller pays and any loan they owe on the house.
4. The title company pays you your $47,800 assignment fee, as shown on the closing statement.
5. The buyer gets the house. The deed goes from the seller directly to the buyer — you never owned it.

That last point is what makes an assignment different from buying and reselling: you're paid for handing over a contract, not for selling a house you own.

Does the buyer pay the assignment fee?

Yes — the buyer pays the assignment fee, as part of what it costs them to take over your contract. From the buyer's side, your fee is part of their purchase price: on the sample deal they're in for $187,800 before repairs, not $140,000. That's why your fee and the buyer's profit come out of the same room. See how much profit to leave your cash buyer.

This is why your fee and the buyer's profit are linked. The buyer decides whether to buy by looking at everything they'll put in — their price for the contract, repairs, holding and selling costs — against what the house will sell for. Your fee is inside that price. Every dollar you add to it is a dollar the buyer doesn't keep. That's why the question "who pays?" leads straight to "how much can they pay?"

Does the seller pay the assignment fee?

No — the seller doesn't pay the assignment fee. They get the price in your contract with them, less whatever closing costs your contract says they pay. Your fee isn't taken out of their price; it's what the buyer pays on top of it. In several states the seller must now be told up front that you intend to resell for a profit — see does the buyer see your assignment fee?

A common beginner worry is that the seller will feel they "paid" the wholesaler. They didn't. The seller agreed to sell for a price, and they receive that price. What happens between you and the buyer afterward doesn't change what the seller gets. What does matter to sellers is feeling informed: tell them up front that you're an investor who may assign the contract to another buyer. In several states that's now required in writing before they sign.

Is the assignment fee added to the purchase price?

In effect, yes. The buyer's total is your contract price plus your fee — $140,000 plus $47,800 on the sample deal. On paper, the fee is usually listed separately from the contract price on the closing statement, but to the buyer it's all part of what they pay for the house.

Does the assignment fee show on the closing statement?

Usually, yes — in most assignments the fee appears on the buyer's closing statement, often as its own line. How it appears depends on the title company and how the closing is set up; ask them before closing. More on what the buyer and seller see in does the buyer see your assignment fee?

When does a wholesaler get paid?

A wholesaler gets paid at closing, when the title or escrow company pays out the funds — usually by wire once everything is signed and funded. Until the deal closes, the fee is a promise in an assignment agreement, not money in your account.

In practice, "at closing" usually means the day the title company has everything it needs — signed documents and the buyer's funds — and records the sale. Most title companies send your fee by wire the same day or the next business day. To avoid delays, give the title company your company name, wire details and a copy of the signed assignment agreement well before closing, and make sure the fee is shown correctly on the closing statement.

Until then, the fee is a promise written in your assignment agreement — not money you can count on. That's why a buyer who actually closes is worth more than one who offers a little more but might not.

Can a wholesaler get paid before closing?

Sometimes part of it. Many assignment agreements require the buyer to put down a deposit when they sign — often held by the title company, sometimes paid to the wholesaler — that counts toward your fee at closing and protects you if the buyer backs out. What's allowed depends on your agreements and your state's rules, so set it up with your title company or attorney.

How much deposit should a buyer put down on an assignment?

There's no set amount, but the deposit should be large enough that the buyer won't walk away lightly — and large enough to protect you if they do. Many wholesalers ask for a few thousand dollars on smaller deals and more on larger ones, and some ask for a deposit that's a share of the fee. What matters is that the assignment agreement says clearly whether it's refundable, when, and whether it counts toward your fee at closing.

A bigger deposit from a buyer with a record of closing is worth more than a slightly higher price from a buyer who won't commit. See how to price a wholesale deal for cash buyers for weighing offers.

What happens to the assignment fee if the deal doesn't close?

If the deal doesn't close, there's usually no assignment fee. What happens to the buyer's deposit depends on your assignment agreement — whether the buyer walked for a reason the agreement allows or simply backed out. What happens to your own earnest money with the seller depends on your purchase contract with them. Read both before you sign either.

This is why the deposit terms in your assignment agreement matter. If a buyer backs out for no reason allowed in the agreement, their deposit is usually meant to compensate you for the time you lost. If the agreement is vague, you may end up with nothing and a contract with the seller that's running out of time. Beginners often skip this detail; a clear deposit clause, reviewed once by a local attorney, protects every deal after it.

What is the difference between an assignment fee and earnest money?

Earnest money is a deposit that shows a party is serious about buying; your assignment fee is what you're paid for handing over your contract. You put earnest money down with the seller when you sign your purchase contract. The buyer may put down a deposit with you when they sign the assignment. Neither deposit is your fee — though the buyer's deposit is often credited toward it at closing.

What is the difference between an assignment fee and a double close?

With an assignment you never buy the house — you hand over your contract and are paid a fee at one closing. With a double close you actually buy the house and resell it in two back-to-back closings, so your profit is the resale price minus your purchase price and two sets of closing costs, and you need funds to buy first. Some states' wholesaling rules cover double closings too, so the structure doesn't change your disclosure duties.

Why is your fee what it is?

Knowing how the $47,800 reaches you is the easy part. The harder question is why it's $47,800 — and not $10,000 or $60,000. That number comes from what buyers near you will actually pay for the contract, minus your contract price. Get it wrong low and the closing statement shows money you gave away; get it wrong high and there's no closing at all. See how to calculate your assignment fee and what the maximum assignment fee is.

To work out that number yourself, see how to determine your assignment fee from real buyer data.

How do you work out what your fee should be?

You work out your fee from the buyers' side, before you market the deal:

1. Look at what investors near you actually paid for houses like this one.
2. Count who's still buying at each fee — budgets, top prices, repair limits.
3. Check the buyer's profit after their costs to buy, hold and resell.
4. Choose your fee inside the range that passes both.

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