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Rich Guide Answers

Question: What is an appropriate assignment fee on a contract with $35,000 equity?

Answer: In general, without knowing any other details, $5,000 is probably fair; $3,000 to $7,000 is a typical assignment fee. You will be paid well for negotiating a deal but you still make it attractive for another investor to purchase the property. However, $35,000 equity doesn’t tell us everything we need to know to make a complete evaluation. What is the market value of the property? If the property is worth $75,000 and doesn’t need much work, this is a great deal and another investor should be happy to pay $5,000 for the contract; if it’s is worth $1 million, the equity won’t even cover the real estate commission when the property is sold. As you calculate the assignment fee, you should also consider the fix-up and holding costs for the investor and set your fee at a point where you can all win.

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