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What is an assignment of the contract?

What is an assignment of the contract?

An assignment of contract is when one party (the “assignor”) has a contract to which they have certain obligations and transfers those contractual obligations to another party (known as the “assignee”).


Assigning real estate contracts is a common way to “flip” real estate without having to come out of your pocket with any capital. Utilizing a real estate assignment contract to profit is also known as wholesaling, flipping contracts, selling contracts, and real estate day trading.



In real estate, assigning contracts is an effective strategy to achieve an extremely high return on investment (ROI) for as little capital and risk as possible.

Is It Legal To Assign A Real Estate Contract?

Yes, it is legal to assign real estate contracts. However, there are situations when assignments will not be enforced, such as:

· Not getting consent from all parties involved. It is important to get written consent from all parties involved in the contract.

Solution: Get written consent from all parties.

· When the existing contract says it is non-assignable. You cannot take it upon yourself to assign a contract that says it is non-assignable.

Solution: Modify the contract with the permission of all involved parties. If the parties involved are okay with it, then you can modify the contract from being non-assignable to assignable.


Why Use A Real Estate Assignment Contract?

The biggest reason to use a real estate assignment contract is: you can profit from a piece of real estate by solely transferring your contract rights. This process is called “wholesaling,” and is a great way to flip real estate while lowering your risk and using as little as money as possible. Many people see the house flipping shows where investors buy, fix, & sell houses. This entire process can take months, and even longer than a year to effectively renovate and resell a property.


When a real estate assignment contract is used where the goal is to wholesale (“assignment of contract”) the property, then you virtually eliminate any risk. This is because you are assigning all contractual obligations to the new buyer of the property.


How to Assign A Contract In Real Estate?

Once you have a property under contract, then it is time to locate a buyer for the real estate contract. An assignment fee (“wholesale fee”) is then agreed upon between you and the buyer. You will then need to execute an Assignment of Real Estate Purchase and Sale agreement between you and the buyer.

How Do Real Estate Wholesalers Get Paid?

Real estate wholesalers get paid when a successful assignment of contract takes place. Their terms of getting paid are to be stated in the Assignment of Real Estate Purchase and Sale Agreement. As a real estate wholesaler, you can get a deposit when the Assignment of Real Estate Purchase and Sale Agreement is signed. Then, when the transaction closes the wholesaler can receive the rest of the profit.

For example, if you are looking to get a $20,000 wholesale fee for a house, then you may take a 50% deposit of $10,000 when the contract is assigned. Then, receive the remaining 50% of $10,000 when the property closes.

Utilizing an assignment of contract in real estate is a profitable exit strategy in real estate. If you don’t want to buy, fix, and flip property, then you can always just wholesale it once it’s under contract by an assignment. Assigning real estate contracts requires little to no capital, takes much less time to complete than other investment strategies, and is a great way to profit quickly from your deals.

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