Assignment of Contract

An assignment of contract is a legal agreement transferring a buyer's rights and obligations under a purchase contract to a new buyer, who closes in their place.

An assignment of contract is the legal mechanism that makes wholesaling work: the buyer on a purchase contract (the assignor) transfers their rights and obligations under that contract to a new buyer (the assignee), usually in exchange for a fee. The original contract stays alive — the assignee simply steps into the buyer's shoes and closes with the seller on the same terms. The transfer itself is documented in a short assignment agreement that names the parties, the property, the original contract, and the fee.

Here is a clean example. You contract a house at $120,000 under a contract that permits assignment. You find a cash buyer who will pay $130,000, sign an assignment agreement with a $10,000 assignment fee, and send both documents to the title company. At closing, the seller gets their $120,000, the buyer pays $130,000, and the title company pays you the $10,000 spread on the settlement statement. You never take title.

What beginners get wrong: they never read the assignment clause. Some contracts prohibit assignment or require the seller's consent — bank-owned and new-construction contracts almost always do — and an unassignable contract forces a double closing or a dead deal. Beginners also market the house instead of the contract, which crosses into licensed-activity territory in several states. Sell your contract position, disclose your role, and know your state's rules — this is not legal advice.