What this deal actually pays you, before you sign anything.
Four numbers decide whether an assignment is worth doing: what the house is worth fixed, what it costs to fix, what your buyer's margin has to be, and what you agreed to pay the seller. Change any one of them and watch the fee move.
$11,500
There is room.
$11,500 at $78,000 to the seller. The buyer is all in at $124,500, or 69% of ARV.
- ARV at 70%
- $126,000
- Less repairs
- − $35,000
- The buyer's ceiling
- $91,000
- Less your contract price
- − $78,000
- Less your costs
- − $1,500
- Assignment fee
- $11,500
The most a buyer on that rule will be all in for.
What he can hand you for the contract.
$79,500
The most you can agree to pay the seller and still clear $10,000. Above this, you are working for the buyer.
Nothing is stored and nothing is sent. The numbers live in this tab and go away when you close it.
The repair estimate is where deals die. Wholesalers put in the number that makes the deal work; the buyer puts in the number his contractor gave him. If those are $12,000 apart, your fee was never $12,000 in the first place.
Run it twice. Once with your repair number and once with the number a pessimistic buyer would use. The second one is the fee you should be negotiating against, because the second one is the one that shows up on the walkthrough.
The walk-away price above is the number worth writing on the back of your hand before the call. Not the offer, the ceiling. It is the point where you start doing the work for free, and knowing it is the difference between holding a price and talking yourself into a bad one.
What is an assignment fee?
It is what you keep for handing your contract to the buyer: his purchase price minus the price you agreed to pay the seller, minus whatever the deal cost you. It is not a commission and you are not selling the house, you are selling your position in the contract.
What is a normal assignment fee?
Most single-family assignments land somewhere between $5,000 and $15,000, and the spread is set by the deal, not by you. On a $60,000 house a $5,000 fee is fine. On a $300,000 one it is a rounding error. The number that matters is what is left after the buyer takes his margin, which is what this calculates.
Where does the 70% rule come from?
It is the flipper's shorthand: pay no more than 70% of after repair value minus repairs, so the remaining 30% covers his holding, closing, selling costs and profit. It is a convention, not arithmetic. In tight markets buyers stretch to 75 or 80, and a landlord buying to hold does not use it at all. Ask your buyers what they actually use and set the toggle to that.
Should I tell the buyer what my fee is?
On an assignment he sees it at closing anyway, on the settlement statement. Big fees on small houses are the usual reason a buyer walks late. If the fee is large relative to the price, expect the question and have the numbers ready.
Why is my fee negative?
Because you agreed to pay the seller more than a buyer on that rule can pay you. There are three honest moves: get the price down, get a better repair number from someone who swings a hammer, or walk. Hoping a buyer breaks his own rule is not one of them.
The fee is the easy part. Remembering to call the seller back is not.
Put the address, the seller and this contract price in, and the deal starts working itself: one question at a time as it moves, a Follow-Up when the seller goes quiet, and every buyer on your list ranked against it the day it goes under contract.