It depends on your methods… personally, if you flip to a group of other qualified investors, they usually have no problem coming up with assignment fees, not to mention the fact that well over half the ones on my list are cash-only on any purchase, fee, or otherwise. I would consider the typical assignment fee to be about $5k or so, anything more than that and you’re probably going to start narrowing the people you can flip it to. Plus, if you have an investment group already lined up (versus trying to retail the property yourself), you usually stand to dump the property MUCH quicker. As a smart man once said “Don’t step over the dimes to get to the dollar.” Anything you make is more than you started out the day with.
Posted by Dietrich7777 on March 28, 2003 at 18:17:07:
I am getting started in the wholesaling business, how do I verify my buyer’s source of funds? Is there a way to know for sure that my buyer has the money to pay the seller?
It doesn’t matter if your buyer doesn’t have the funds, as long as you assign the contract instead of doing a double closing. Simply fill out a 1 page “assignment of contract” and have your buyer sign it, then he pays you and your out of the deal and get to keep the money regardless if the buyer closes or not. Also after you assign the contract have the seller sign a release of liability so that he cant come after you if the new buyer doesn’t close.
It should be noted, however, that (usually) you will stand to make much more money double-closing versus assigning. Also, some buyers are wary of assignments if they don’t know you from Adam. Just my $0.02
I think it’s funny how some people talk about assignment but they don’t bring up the fact that most buyers don’t have the money to pay assignment fees.
How many buyers are going to folk out 20K or 30K in assignment fee? Probably one in fifty.
And then we have people that say if you can’t assign it then move on to the next buyer. YEAH RIGHT. It’s hard enough trying to find one buyer for a house, now we can just go and replace with a new one.