How to Assign a Wholesale Contract

What is a contract assignment?

When you sign a purchase and sale agreement to buy a property, you acquire equitable interest in that property. An assignment transfers that equitable interest to another buyer in exchange for a fee. You are not selling the property itself. You are selling your right to purchase it under the terms of your existing contract.

The end buyer steps into your position and closes directly with the seller. Your assignment fee is the difference between your contract price and the price the end buyer pays, or a separately negotiated fee depending on how your deal is structured.

Check your contract for assignment language

Before you market a deal, review your purchase and sale agreement for any clause that restricts or prohibits assignment. Some contracts include language such as "this contract may not be assigned without written consent of the seller." If your contract has this language, you will need the seller's written consent before you can assign it.

Many wholesalers use their own purchase and sale agreement that explicitly permits assignment. If you are using a standard form contract, have a real estate attorney review it before you sign.

The assignment of contract document

The assignment of contract is a separate document from the original purchase and sale agreement. It identifies the original contract, the assignor (you), the assignee (the end buyer), the property, and the assignment fee. Both the assignor and assignee sign it.

The assignment document is then delivered to the title company or closing attorney along with the original purchase and sale agreement. The title company prepares the closing disclosure and coordinates the closing with all parties.

How the closing flow works

Once the assignment is signed and delivered to the title company, the end buyer proceeds with their due diligence. This may include a title search, a property inspection, and a review of any liens or encumbrances. When due diligence is complete and both parties are ready, the closing is scheduled.

At closing, the end buyer brings their funds. The title company disburses the purchase price to the seller, your assignment fee to you, and any other amounts specified in the closing disclosure. You do not need to attend closing in most cases, though requirements vary by state and title company.

For a step by step guide to marketing your deal before you get to this point, see our guide on how to sell a wholesale deal.

Assignment vs double close

An assignment is the simpler of the two exit strategies. Your fee is visible on the closing statement, which means the seller and buyer can see what you are making. Some sellers object to large assignment fees when they become visible at closing.

A double close involves two separate transactions: you purchase the property from the seller and immediately resell it to the end buyer. Your profit is not visible to either party. Double closes require two sets of closing costs and more coordination. Consult a real estate attorney to determine which approach is appropriate for your specific situation and state.

Find a buyer for your contract

Once your contract is ready to assign, you need a buyer. Buyers AI can blast your deal to thousands of active cash buyers within 24 hours for a flat fee of $199, or work the deal as a JV partner for a 50/50 split at closing with no upfront cost.