MODULE 08
THE HANDOFF HAS
TO BE CLEAN.
The assignment is the shortest part of a wholesale deal and the part where the most goes wrong, because it is where three parties and a law firm have to agree on what is happening.
What actually happens at assignment
- You hold an assignable contract with the seller, with assignment permitted in writing and disclosed in conversation.
- You present the property to buyers with the scope, the honest condition, your comparables and your number.
- A buyer commits and you execute an assignment agreement between you and them, stating the fee and how it is paid.
- The assignee typically posts their own earnest money, and your deposit is dealt with according to the documents.
- Everything goes to the closing attorney — the original contract, the assignment, both parties' details and the fee.
- The seller is informed of who is now closing.
- Closing happens between the seller and the assignee. Your fee is disbursed at the table and appears on the statement.
The single most common failure is step five happening late. Closing attorneys need time. An assignment delivered two days before a closing date is how closings move.
Assignment or double close
A double close is two separate transactions on the same property, usually on the same day. You buy from the seller, then sell to your buyer, with funds arranged through the closing attorney or through short-term transactional funding.
It is the right tool in specific situations: when a contract prohibits assignment, when a buyer or a lender requires a direct chain of title, or when the structure of the transaction genuinely calls for it. It costs a second set of closing costs, requires funding, and needs an attorney who does them routinely.
One reason is often given that deserves examination. Double closes are sometimes used so that the seller does not see the wholesaler's fee on a statement. If your fee is one you would not want a seller to see, the problem is not the statement. Disclose your role and your intent to profit before signing, and the question largely disappears.
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What the closing attorney needs, and when
- The fully executed purchase agreement, with every amendment, as early as possible so title work can begin.
- Every seller on title, correctly named, with contact details.
- The executed assignment agreement, with the fee stated and the assignee identified.
- The assignee's entity details and signing authority.
- Anything you know about the title: a death, a divorce, a lien, a tenant, a code violation, an unpermitted addition. Tell them everything, including what you suspect.
- Payoff information for anything the seller has mentioned owing.
Treat the closing attorney as a partner rather than a vendor. A firm that knows how you work, has your forms on file and hears about problems early will keep more of your deals alive than any other single relationship in the business.
Transparency with both sides
An assignment has two counterparties and each needs different information.
The seller needs to know before they sign that the contract may be assigned, that you intend to profit, and that the buyer at the table may not be you. They need to be told promptly when an assignee is in place and who they are. Nothing about the closing should be new information on closing day.
The buyer needs an accurate scope, honest photographs including the problems, your comparables and how you got to your number, anything you know about the title or the tenancy, and a clear statement of your fee. They also need to know what you did not check, which is a sentence almost nobody says and which builds enormous credibility.
Ben is a principal buyer, not a broker or an attorney, and does not represent either side in a transaction. Saying that plainly to both is not a weakness in the position. It is the position.
When an assignment falls apart
It happens. What matters is what you do in the next hour.
Tell the seller immediately, in plain language, with what you know and what you are doing about it. Do not go quiet for a week and reappear with a reduced number and a story. If you cannot perform, say so, release the contract cleanly and let them get on with their lives. Honour whatever the contract says about earnest money rather than negotiating your way out of it.
That is expensive in the moment and it is the cheapest marketing you will ever do. Sellers talk. Closing attorneys talk. Agents talk. In a market the size of the Midlands, the number of people who know how you behaved is smaller than you think and the memory is longer.
Frequently asked
Questions people actually ask
Does the seller see my assignment fee?
In an assignment it typically appears on the closing statement, which is one of several reasons to disclose your role and your intent to profit before anyone signs. A fee that was explained in advance is rarely a problem at the table.
When should a double close be used?
When a contract prohibits assignment, when a party or a lender requires a direct chain of title, or when the structure genuinely calls for it. Using one purely to hide a fee from a seller is treating a disclosure problem as a paperwork problem.
How early should the closing attorney get the file?
As soon as the purchase agreement is signed. Title work is the longest part of most closings, and late delivery of an assignment is the most common reason a closing date moves.
What happens to my earnest money when I assign?
It depends on the documents. Commonly the assignee posts their own and yours is returned or credited, but that has to be written rather than assumed. Have an attorney confirm how your forms handle it.
Can I assign a contract more than once?
That depends on the contract terms and on what the seller agreed to, and repeated reassignment is exactly the pattern that has attracted regulatory attention. Ask a South Carolina attorney before contemplating it.
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