How to price a wholesale assignment fee

An assignment fee is the dollars between the price on your purchase contract and the price your end buyer pays. It is not a percent of after-repair value, and it is not a reward for finding the lead. The buyer’s ceiling is their maximum allowable offer. Anything you charge above that ceiling asks them to buy a deal they would not buy from the seller directly. This page is a pricing worksheet. It is not a contract, not a legal form, and not advice on whether an assignment is allowed on a given property.

The ceiling is the buyer’s offer, not the ARV

A buyer who uses the 25/5/3 formula keeps a profit reserve, a closing reserve, and a holding reserve before they will write a purchase price. Those reserves come off the ARV first. If you price your fee as “10 percent of ARV” or “whatever is left under the ARV,” you are spending reserves the buyer already decided to keep. They will either cut your fee or pass. The number that matters is the offer they would make if the repairs and the ARV are the ones they believe.

Use their repair number, not a lighter one you used to win the contract conversation. The buyer funds the rehab. A $40,000 rehab they believe is not a $25,000 rehab because the kitchen looked fine in a photo. Disagreement on repairs is a reason to walk the house together, not a reason to hide the difference inside the fee. Once you agree on ARV and repairs, compute the offer. The MAO calculator starts at 25, 5, and 3 and lets you change each percent when this buyer publishes a different cushion.

A worked ceiling

These figures are a worked example, not a closed wholesale and not a fee you should copy onto the next lead. The end buyer’s ARV is $200,000 and their repairs are $40,000. At 25/5/3 their maximum allowable offer is $94,000. You have the property under contract at $80,000. The most they can pay you, and still be exactly at their own ceiling, is $94,000. The assignment fee at that ceiling is $94,000 − $80,000 = $14,000.

A fee of $14,000 leaves the buyer with zero extra room. They are paying the same price they would have paid the seller. Many buyers want the assignment to be cheaper than doing the work themselves, so the fee that actually sells is lower than the mathematical ceiling. The ceiling still matters: a fee above $14,000 on these inputs pushes them past the offer the formula allows. There is no second pocket of ARV to take it from. The $106,000 gap between the $200,000 ARV and the $94,000 offer is their profit, closing, and holding reserves plus the $40,000 rehab, and it is not your fee.

Turn the worksheet around when you have not gone under contract yet. Suppose you need $10,000 for the assignment to be worth the time. Their ceiling is still $94,000. Your maximum contract price is $94,000 − $10,000 = $84,000. If the seller will not take $84,000 or less, the fee has to shrink or this is not a wholesale at this ARV and this rehab. Raising the ARV to make the fee fit is the failure mode. The ARV has to come from sold comps. How to pull comps is the weight table the report uses, so a hopeful list price does not become the buyer’s ceiling by accident.

Four lines to write down before you quote a fee

1. The buyer’s after-repair value, and a note of how many recent sold comps support it.
2. The buyer’s repair number, after a scope, not before one.
3. The buyer’s maximum allowable offer at the percents they actually use.
4. The fee you need, subtracted from that offer, which is the most you can pay the seller.

If line 4 is below what the seller already told you they will accept, stop adjusting the fee in your head until it “works.” Either the seller’s number moves, the buyer’s repairs move because the scope changed, or you do not have an assignment. Quoting a fee that only fits if the buyer ignores their own offer wastes the buyer and teaches them to ignore your next number.

Double-check the direction of the subtraction. Contract price plus fee equals what the buyer pays. Buyer payment has to be at or under their MAO. Fee equals buyer payment minus contract price. People swap the last step and describe a $14,000 spread as if it were the profit on the flip. It is not. The buyer’s flip profit is whatever remains after they pay you, repair the house, carry it, and sell it. Your fee is a cost to them on the day they take the contract. The BRRRR refinance math is a different exit. A buyer who plans to refinance rather than resell still has a ceiling on what they can pay today, because cash-in is purchase plus rehab and the new loan is a percent of ARV. A fat assignment fee is cash they may not get back at the refinance.

What this worksheet will not do

It will not tell you that an end buyer exists at $94,000. It will not tell you that a seller will sign at $80,000. It will not produce an assignment agreement, an earnest-money clause, or a disclosure. Those are documents for a lawyer and for the rules in that state, not for a pricing page. It also will not assume every buyer uses 25/5/3. If a buyer’s written rule is a higher profit percent, their ceiling is lower and your $14,000 example does not transfer. Change the percents and read the new offer before you quote.

It will not treat your marketing cost, your fuel, or your time as a line the buyer owes on top of their ceiling. Those costs decide whether the fee you need is $10,000 or some other number. They do not raise the buyer’s maximum allowable offer. If the fee you need is larger than the gap between a realistic contract and their offer, the lead is a lead and not a wholesale.

Keep the buyer’s name, the address, and the real dollars off any page you publish. The numbers on this page stay round on purpose so another investor can audit the subtraction without mistaking them for someone’s transaction. When you run a live deal, write the four lines in your own notes, next to the comp list, and let the fee be whatever is left.

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