What Is Assignment of Contract?
Also known as: Assignment Contract, Contract Assignment
An assignment of contract is the most common wholesale exit: the wholesaler signs a purchase agreement with a seller, then transfers (assigns) their rights in that contract to an end buyer for an assignment fee.
An assignment of contract is the most common wholesale exit: the wholesaler signs a purchase agreement with a seller, then transfers (assigns) their rights in that contract to an end buyer for an assignment fee.
Assignment of Contract explained
In a standard assignment, the wholesaler never actually buys the property. They put it under contract, securing the right to purchase it, and then sell that right to a cash buyer who closes in their place. The wholesaler's profit is the assignment fee, paid at closing.
This works because a real estate purchase contract is itself an asset with value. Wholesalers typically add an 'and/or assigns' clause to the buyer line so the agreement is clearly assignable. Assignment is fast and capital-light, but it requires that your contract permits assignment and that local rules allow it. Some states and some seller situations (such as bank-owned deals) restrict assignment, which is when a double close is used instead.
Example
You contract a house for $146,000 and assign that contract to a cash buyer for $156,000. At closing, the buyer pays $146,000 to the seller and a $10,000 assignment fee to you. You never took title.
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