What Is an Assignment of Contract?

An assignment involves getting a property under contract and then assigning that contract to another buyer—usually another investor—for a fee. The original buyer (you) never actually takes ownership of the property.

Pros of Assigning the Contract

• Lower Costs: Since you don’t take title, you avoid closing costs like title insurance, transfer taxes, and recording fees

• Fast & Simple: Only one closing takes place (between your end buyer and the original seller)

• No Need for Funding: You’re not required to bring cash or hard money to close

• Minimal Risk: You’re not on the hook for ownership or repairs

Cons of Assigning the Contract

• Assignment Fee Visibility: Your profit is shown on the HUD, and some buyers may balk at a large assignment fee

• Seller/Buyer Approval: The contract must allow assignments, and some sellers or buyers may object

• Less Control: Since you’re not closing, you lose control over the final transaction, which can create risk if the end buyer backs out

• Legal Restrictions: Some states require specific disclosures, or prohibit assignments on certain types of contracts (like bank-owned or HUD properties). Some states are cracking down on wholesalers so check with your state regulations. Otherwise, you may need to bring actual funds to closing or use a third party transactional funding service

Typical Costs (Assignment Strategy)

• Earnest Money Deposit (EMD): Usually $100–$1,000

• Marketing Costs: To find the end buyer

Reasons to Wholesale

• Reasonable Fee: The assignment fee is reasonable enough not to raise any objections with the buyer or seller

  Trusted Buyer: The buyer accepts your assignment fee without condition

  Experienced Buyer: The buyer is an experienced investor and does not care how much you earn as long as his end price works for him

  Investor Friendly Title Company: You title company is experienced working with wholesalers. They will include the assignment fee as a line item on the buyer side of the HUD. This is important because the seller will only be looking at their costs and what they will net out of the closing

What Is a Double Closing?

A double closing involves two separate transactions:

• Transaction A: You (Investor A) buy from the original seller

• Transaction B: You immediately sell to the end buyer (Investor B or retail buyer)

These two closings often happen on the same day or within 24–48 hours.

Pros of a Double Closing

• Hide Your Profit: Your spread is not disclosed to the buyer or seller

• Greater Control: You own the property for a short time, allowing you to structure the deal how you want

• No Assignment Clause Needed: Since you’re actually buying the property, you don’t need an assignable contract

• Works With Banks & REOs: Useful when sellers prohibit assignments

Cons of a Double Closing

• Higher Closing Costs: You pay two sets of closing costs (buy and sell sides) but you can negotiate with your end buyer to pay your seller closing costs

• Requires Funding: Depending on your state, you may need to bring your own funds to closing or use transactional funding or private capital, at least for a few hours

• Slightly More Complex: More moving parts, paperwork, and coordination needed

Typical Costs (Double Closing Strategy)

First Closing (A to B – You Buy Property)

• Title Insurance

• Escrow Fee

• Recording Fee

• Transfer Tax (if applicable)

• Lender Fees (if using transactional funding)

• Attorney Fees / Closing Fees

💰 Estimated: $2,000–$5,000+ depending on state and purchase price

Second Closing (B to C – You Sell to End Buyer)

• Seller Title Fees

• Escrow/Attorney Fees

• Transfer Tax

• Payoff to Transactional Lender (including interest and fees), if applicable

💰 Estimated: $1,500–$4,000

Additional:

• Transactional Funding Fee: 1%–2% of purchase price or flat fee (often $1,000–$2,500)

• Holding Costs: Usually none if both closings occur same day, but you may be responsible for utilities or taxes for a day or two depending on your jurisdiction

Reasons to Double Close

• Large Fee Spread: You determine the assignment fee is large enough that assigning may cause concern with your buyer

• No Assignment Clause: The seller will not allow assignments

• Institutional Seller: The seller is a financial institution or auction house and will not allow assignments
  
  
• Total Control: You need complete control of the process

Example:

Let’s say you contract a property for $100,000 and assign it or double close with an end buyer at $125,000:

Assignment

• You make a $25,000 assignment fee

• Buyer closes with the seller

• You pay little to no closing costs

• You walk away with $25,000 (minus any minor fees)

Double Closing

• A to B: You buy for $100,000, pay ~$3,000 in costs

• B to C: You sell for $125,000, but have the buyer pay seller closing costs ~$3,000

• You might pay $1,500 in funding fees

• Net profit: $22,000

Still a solid spread—but more expensive to execute.

Both strategies have a place in a real estate investor’s toolbox. Assignments are lean and fast but may not always be allowed or suitable for large spreads. Double closings offer flexibility and discretion but cost more and require funding.

Choose wisely.