What Is an Assignment Contract in Real Estate?

An assignment contract is a legal agreement that allows a buyer (the assignor) to transfer their rights and obligations in a purchase agreement to another buyer (the assignee). It’s commonly used in wholesale real estate deals, where investors profit by assigning contracts rather than purchasing properties directly.

✅ How an Assignment Contract Works

  • Step 1: The wholesaler or buyer signs a purchase agreement with the seller.
  • Step 2: An assignment contract transfers the buyer’s rights to another buyer, who agrees to close under the same terms.
  • Step 3: The original buyer collects an assignment fee from the end buyer at closing.

Once assigned, the new buyer steps into the original buyer’s position and completes the transaction with the seller.

💡 Key Details to Know

  • Disclosure is essential: Sellers should be informed that the buyer may assign the contract.
  • No property ownership transfer: Only contractual rights are assigned — not the title.
  • Assignment fees: Typically range from a few thousand dollars to a percentage of the purchase price.
  • Not always allowed: Some contracts include a “no assignment” clause, so permission may be required.

📍 Assignment Contracts for FSBO Sellers

If you’re selling For Sale By Owner (FSBO), an investor may approach you using an assignment structure. While these deals can close quickly, they often involve below-market offers. Listing on the MLS with Brokerless gives your property exposure to both investors and retail buyers—without paying 6% commission.

🧩 Common Myths About Assignment Contracts

  • “Assignments are illegal.” ❌ They’re legal in most states when disclosed and structured properly.
  • “The assignee must rewrite the contract.” ❌ The original agreement stays in place — it’s just reassigned.
  • “Only wholesalers use assignments.” ❌ Any buyer can assign a contract if the seller allows it.