Quick Answer

An assignment of contract is when the buyer on a purchase agreement transfers the right to buy the property to another buyer, usually for a fee. The original buyer, often a wholesaler, never takes title. The new buyer steps into the contract and closes with the seller on the original terms.

What Is an Assignment of Contract?

In real estate, an assignment of contract lets the buyer on a purchase agreement (the assignor) hand that contract to someone else (the assignee). The assignee takes over the buyer's rights and duties and closes directly with the seller. The assignor is paid an assignment fee for finding and locking up the deal.

It is the most common structure in wholesaling. A wholesaler signs a contract with a seller, finds an investor who wants the property, and assigns the contract to that investor.

How an Assignment Works

  1. The wholesaler signs a purchase agreement with the seller. The contract must allow assignment. Buyers often sign as their name followed by "and/or assigns."
  2. The wholesaler finds an end buyer and both sign an assignment agreement that sets the fee and the terms.
  3. The end buyer puts down an earnest money deposit with the title company or closing attorney.
  4. At closing, the end buyer pays the contract price plus the assignment fee. The seller deeds the property directly to the end buyer.

Example: The contract price with the seller is $150,000. The wholesaler assigns the contract for a $10,000 fee. The end buyer brings $160,000 plus closing costs. The seller receives $150,000, less the seller's own costs, and the wholesaler receives $10,000.

Because there is only one closing, the seller and the end buyer will usually see the assignment fee on the settlement statement.

Assignment vs. Double Closing

In an assignment there is one closing and the wholesaler never owns the property. In a double closing, the investor buys the property first and then resells it in a second, separate transaction.

A double closing costs more, because there are two sets of closing costs and the first purchase has to be funded. In exchange, it keeps the two sides separate and can fall outside some of the state rules written for assignments.

State Rules on Assigning Contracts

Several of the states we serve have passed wholesaling laws in recent years. Rules vary by state, and this is general information, not legal advice. Talk to a real estate attorney in the state where the property sits before you assign a contract.

  • Arizona: A.R.S. §44-5101 (2022) requires written disclosure to the seller and the end buyer before a binding agreement.
  • Kentucky: HB 62 (2023, KRS 324.010 and 324.020) requires a license to advertise an equitable interest (a contract) in property.
  • Ohio: ORC 5301.95 (SB 155, effective March 2, 2026) requires a separate signed disclosure to the owner, in bold 12-point type, before a wholesale contract. Without it, the owner may cancel before closing.
  • Oklahoma: 59 O.S. §858-301 (2021) requires a license to publicly market an equitable interest (a contract). Since November 1, 2025, 59 O.S. §858-314 requires wholesalers to disclose in writing that they plan to resell for more, give the homeowner two business days to cancel, and hold earnest money in an Oklahoma escrow account.
  • South Carolina: Act 204 (2024) treats marketing a property before you hold title as wholesaling that requires a broker license. The Real Estate Commission's November 2024 advisory opinion says this includes private email lists.
  • Tennessee: TCA 66-4-401 to 66-4-403 (2025) requires a bold disclosure and written notice to the seller 3 business days before an assignment.
  • Texas: Prop. Code §5.0205 (effective January 1, 2024) requires written disclosure to the seller of the intent to assign, and to the buyer that only a contract interest is being sold.

Laws in other states can change too. Check current rules before every deal.

Frequently Asked Questions

Is assignment of contract legal?

Assigning a real estate purchase contract is generally allowed when the contract permits it, but several states now regulate how it is done. Arizona, Ohio, Oklahoma, Tennessee, and Texas require specific disclosures, and South Carolina, Kentucky and Oklahoma restrict marketing a contract without a license. This is general information, not legal advice. Talk to a real estate attorney.

What is an assignment fee?

An assignment fee is the amount the end buyer pays the original buyer for taking over the purchase contract. It is paid at closing on top of the contract price, and it is negotiated deal by deal.

Does the seller have to agree to an assignment?

It depends on the contract. Many contracts allow assignment by naming the buyer followed by "and/or assigns." Some contracts prohibit assignment or require the seller's consent, and several states require written disclosure to the seller.

What is the difference between an assignment and a double closing?

In an assignment there is one closing and the wholesaler never owns the property. In a double closing the investor buys the property and then resells it in a second closing, which costs more but keeps the two transactions separate.

Related Terms & Guides

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