Assignment vs. Double Closing: How Wholesalers Get Paid

Once a wholesaler gets a property under contract and finds an end buyer, there are two common ways to close and get paid: assign the contract or double close. Each has different costs, paperwork, and disclosure consequences. Choosing the wrong one can cost you thousands or kill the deal. Here's how each works and how to choose.

Option 1: Assignment of contract

You've signed a purchase agreement with the seller that allows assignment (often written as "[Your LLC] and/or assigns"). You sign an assignment agreement with the end buyer, transferring your rights and obligations. The end buyer closes directly with the seller.

How the money flows

1. The end buyer pays you a non-refundable deposit at signing, often held by the title company.
2. At closing, the end buyer brings the full contract price plus your assignment fee.
3. The title company pays the seller the contract price (minus payoffs and costs) and pays you the fee.

Example

Pros

• One closing, one set of closing costs (paid by the buyer, typically).
• No funding needed on your side.
• Simple paperwork.

Cons

• Your fee usually appears on the settlement statement. Large fees can upset sellers or buyers.
• Some contracts prohibit assignment: many bank-owned (REO), HUD, short sale, and MLS listing contracts.
• Some lenders won't finance an end buyer on an assigned contract, limiting you to cash and hard money buyers.
• State wholesaling laws may require disclosures to both seller and assignee.

Option 2: Double closing

You buy the property from the seller (the "A-to-B" closing), then sell it to the end buyer (the "B-to-C" closing), usually the same day or within days.

How the money flows

1. You need funds for the A-to-B purchase. Options: your own cash, a private lender, or transactional funding, a short-term loan designed to fund a purchase that's repaid from a resale scheduled the same day.
2. You close A-to-B and take title.
3. You close B-to-C. The end buyer's funds repay the transactional lender, and you keep the difference.

Some title companies once used the end buyer's funds to pay for the A-to-B purchase directly. Many lenders and title underwriters now restrict that, which is why transactional funding exists. Ask your title company exactly how it handles double closings.

Example

Pros

• Works when the contract can't be assigned.
• The end buyer sees your sale price, not a separate "assignment fee" line, which some find less contentious.
• Works with end buyers using conventional financing in some cases.

Cons

• Two sets of closing costs; transfer taxes can apply twice, depending on the state.
• Transactional funding fees.
• More coordination; if the B-to-C closing falls through, you may own the property.
• You briefly hold title, which can bring seller disclosure obligations.
• Not a way around state wholesaling law: disclosure and licensing rules may still apply.

Side-by-side comparison

When to use which

• ☐ Assign when your fee is moderate, the contract allows assignment, and the buyer pays cash or uses hard money.
• ☐ Double close when the contract prohibits assignment, the spread is large enough to absorb extra costs, or your buyer's lender won't accept assignments.
• ☐ Neither when the spread doesn't cover costs plus a reasonable fee. Renegotiate honestly or cancel within your inspection period.

A rough break-even rule: a double close typically costs 3–5% of the price in extra fees and closing costs (varies by state and lender). If your spread is under about $10,000 on a $100,000 property, an assignment usually leaves you with more.

Paperwork checklist

Assignment:

• ☐ Purchase agreement with assignment permission and required disclosures.
• ☐ Assignment agreement (fee, deposit, assumption of obligations, closing date).
• ☐ Any state-required disclosure to the assignee.
• ☐ Buyer deposit receipt.
• ☐ Settlement statement reviewed by all parties.

Double close:

• ☐ A-to-B purchase agreement with required disclosures.
• ☐ B-to-C purchase agreement with the end buyer.
• ☐ Transactional funding agreement and proof of the B-to-C contract for the lender.
• ☐ Title company confirmation that it handles same-day double closings.
• ☐ Insurance, if you'll hold title longer than a day.
• ☐ Two settlement statements.

When the seller sees your fee

With an assignment, the seller will often see your fee on the settlement statement. Don't try to hide it. Explain it early, when you first describe what you do:

"If I assign this contract, the investor who closes will pay me a fee for finding the deal and handling the work. It will show on the closing statement. You'll still receive exactly the contract price we agreed on."

Sellers who hear this upfront rarely object at closing. Sellers who discover a $20,000 line item they weren't told about are the ones who call attorneys and regulators. In states with mandatory wholesale disclosures, telling them is required anyway.

Common closing problems and fixes

Talk to your title company first

Before you get a property under contract, ask a title company or closing attorney:

• "Do you close assignments, and how do you show the fee?"
• "Do you close double closings with transactional funding?"
• "What documents do you need from me, and how far in advance?"
• "Are there transfer taxes on both legs in this county?"

Their answers decide which exit is realistic.

Your next step

Take your last lead (or a sample deal), and calculate your net under both methods with real closing cost and transfer tax figures from a local title company. You'll quickly see the spread at which double closing starts to make sense in your market.

The full guide, Real Estate Wholesaling for Beginners, covers state wholesaling laws, deal math, motivated-seller marketing, seller scripts, contracts, assignments, double closes, title problems, buyer lists, and a 30/60/90-day plan, for $0.99.