Short answer: The assignment fee is the whole business, and it is usually documented in one or two sentences that nobody reads carefully. When it is earned, who pays it and how it appears at closing are three separate questions.
- Earned on assignment, paid at closing is the usual structure, and the gap between those two is where fees are lost.
- The assignee normally pays, out of their funds at the closing table.
- The fee usually appears on the settlement statement, so assume the seller can see it.
- A deposit against the fee is the main protection against an assignee who walks.
Wholesalers negotiate the purchase price for hours and then document the fee, the only money they actually receive, in a single line. This page covers what that line has to say.
Contents
Earned and paid are different dates
When the assignment is signed you have performed
Paid
At closing, from the assignee’s funds weeks later
The gap
Assignee walks → you earned a fee nobody pays
Most assignment agreements say the fee is payable at closing. That is normal, and it means a deal that never closes produces nothing. The question your agreement should answer is what happens in that case.
The non-refundable deposit
The common protection is a deposit paid on signing the assignment, credited against the fee at closing and retained if the assignee fails to perform. It does two useful things: it filters out buyers who were never serious, and it gives you something if the deal collapses.
Calling a deposit non-refundable does not automatically make it so. Whether a retained deposit is enforceable as liquidated damages or struck down as a penalty is a question of state law and proportionality. A modest deposit that reflects real reliance is far more defensible than an outsized one.
Who pays, and how it shows up
| Structure | How it works | What to watch |
|---|---|---|
| Assignee pays at closing | Fee is a line item, funded from the assignee’s money | Standard. Appears on the settlement statement. |
| Deposit plus balance at closing | Part on signing, remainder at the table | Best protection. Document the credit clearly. |
| Paid outside closing | Assignee pays you directly | Some title companies will not permit it, and it can look like concealment. Ask first. |
| Built into the resale price | You double close instead of assigning | Different structure, two sets of closing costs. |
Assume the seller can see it
In most closings the assignment fee is disclosed on the settlement statement. Wholesalers who need the number concealed generally have to double close and pay for the privilege.
There is also a practical point here that is worth more than the legal one. A fee that a seller would find shocking is usually a signal that the offer was too aggressive rather than that the disclosure is the problem. Deals that fall apart at the table over a revealed fee were often fragile before anyone saw a number.
The clauses that decide whether you get paid
- Amount, stated plainly. A fixed sum is cleaner than a formula. If it must be a formula, define every input.
- When it is earned, and separately, when it is payable.
- Deposit, amount, credit against the fee, and what happens on default.
- Source of payment. Named as coming from the assignee’s funds at closing.
- What happens if closing is delayed by the assignee rather than the seller.
- What happens if the assignee assigns again. Say whether they can, because otherwise they will.
- Assumption of obligations, so the assignee takes your duties along with your rights.
- Governing law and dispute resolution.
Where fees actually get lost
- No deposit. The assignee walks a week before closing and you have nothing.
- Assignee’s funds never verified. Verify before you assign, not after.
- Fee larger than the deal supports. The end buyer recalculates at the table and renegotiates from a position of strength.
- Title company will not disburse a fee structured the way you assumed. Ask how they handle it before you sign.
- Inherited deadlines. Your assignee gets your closing date. Assign with runway or the contract expires under both of you.
Frequently asked questions
How is an assignment fee paid?
Usually at closing, funded from the assignee’s money and shown as a line item on the settlement statement. Many wholesalers also take a deposit on signing the assignment, credited against the fee.
Can I make the assignment fee non-refundable?
You can write it that way, and it is common. Whether a retained deposit is enforceable depends on state law and whether the amount looks like a reasonable estimate of your loss rather than a penalty. Modest and proportionate holds up better.
Does the seller see the assignment fee?
In most closings, yes, because it appears on the settlement statement. Wholesalers who need it concealed typically double close instead, which means paying two sets of closing costs.
Is there a limit on how much I can charge?
Most states do not cap the fee directly. The practical limits are what the deal supports and what your end buyer will accept once they run their own numbers. A few states have begun regulating wholesaling more heavily, so check your own.
What if my assignee does not close?
Unless the seller released you, you remain the buyer under the original purchase contract, with your earnest money and potentially your performance obligation still live. A deposit from the assignee is the usual protection.
Can my assignee assign the contract again?
Only if your assignment agreement permits it. If you are silent on the point, you may find your contract has moved on twice and your closing date has not.
The fee is the only money you actually touch
Getting the deposit, the timing and the disbursement right is what separates a wholesaler who gets paid from one who gets a lesson. Inside the free group we go through real assignments, real numbers and what to do when a buyer tries to renegotiate at the table. 1,100 wholesalers already in there. No cash, no credit, no license needed.
Join the free groupSources
Assignment of contract rights, general principles
Liquidated damages and penalty doctrine
Title and escrow practice on disbursement of assignment fees
State wholesaler disclosure statutes enacted 2024 to 2026
This article explains common practice and is not legal advice. Contract law, disclosure duties and wholesaler licensing rules vary by state and change often. Have a real estate attorney licensed in your state review any agreement before you sign or use it.