Your wholesale fee (or assignment fee) is the difference between the price you put a property under contract for and the price your end buyer pays, minus your costs. It is set by the deal's spread, which comes from buying below your maximum allowable offer.
What a wholesale fee is
When you assign a contract, your fee is simply: buyer's price minus your contract price, minus any costs (marketing, transaction fees). You are paid for finding and controlling the deal.
How it is set
The fee lives in the spread, and the spread is created the moment you contract below the right number. That number comes from the deal math: ARV and MAO. If you overpay the seller, there is no spread and no fee. See ARV and MAO explained.
What is realistic
Fees vary widely by market and deal size. A commonly cited range for newer wholesalers is roughly $5,000 to $15,000 per deal, with bigger spreads on larger or more distressed properties (this is a general range, not a promise; verify against deals in your market).
A worked example
Example numbers to show the math: you contract a property at $160,000 (your MAO), a cash buyer agrees to $172,000, and you have about $2,000 in costs.
- Buyer price - contract price: $172,000 - $160,000 = $12,000
- Minus costs: $12,000 - $2,000 = $10,000 assignment fee
Protecting your fee
- Do not overpay the seller, the spread is the fee.
- Know your buyers and what they will actually pay.
- Move fast, stale contracts lose buyers.
- Keep the deal math on the lead so you never contract blind.
Pipelio puts ARV, MAO, and the spread on every lead so your fee is protected before you sign.