What Is Wholesale Fee?
Also known as: Assignment Fee
The wholesale fee, also called the assignment fee, is the wholesaler's profit on a deal: the difference between the price under contract with the seller and the price the end buyer pays, collected at closing.
The wholesale fee, also called the assignment fee, is the wholesaler's profit on a deal: the difference between the price under contract with the seller and the price the end buyer pays, collected at closing.
Wholesale Fee explained
The wholesale fee is how wholesalers get paid. When you assign a contract, the fee is the markup between your contract price with the seller and the amount your cash buyer agrees to pay. In a double close, it is the spread between the A-to-B and B-to-C prices.
Fee size depends on the deal's spread, the market, and how much value you added in finding and negotiating the deal. Many wholesalers target fees in the $5,000 to $15,000 range, though larger spreads on bigger deals can produce more. The fee must fit inside the MAO math, because if it pushes the end buyer's all-in cost too high, the buyer walks.
Example
You lock a property at $146,000 and assign it to a buyer for $156,000. The $10,000 difference is your wholesale fee, paid to you by the title company at closing.
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