Assignment Fees in Florida Real Estate
An assignment fee is the profit earned by a Florida real estate investor who assigns their purchase contract to an end buyer before closing. This fee compensates the investor for finding and securing the deal, and is the foundation of wholesale real estate transactions.
How Wholesaling Works
The investor enters into a purchase contract with the seller at a negotiated price. Before closing, the investor assigns the contract to an end buyer at a higher price. The difference is the assignment fee. The investor never takes title to the property; they sell the contractual right to purchase. The end buyer closes directly with the original seller at the contract price plus the assignment fee.
Legal Considerations
Florida law permits contract assignments unless the contract prohibits them. However, the Florida Real Estate Commission has scrutinized wholesaling activities for potential unlicensed practice of real estate under Section 475.01. Investors who regularly market properties they do not own may be required to hold a real estate license. Assignment fees must be disclosed on the closing statement to ensure transparency.
Related Terms
Barnes Walker Real Estate
Barnes Walker advises on real estate assignment transactions throughout Southwest Florida. Contact us for wholesale transaction guidance.
Reviewed by the attorneys at Barnes Walker, Goethe, Shea & Robinson, PLLC