Flat assignment fee or a percentage on a commercial wholesale deal

The percentage shrug is real, and the money is only part of it. A percentage reads as a rate card, which means it applies to everyone and is nothing personal. A flat number reads as a price invented for this one buyer, so of course they negotiate it. Anyone who has priced service contracts has watched the same thing happen. Same total, different resistance.

@mikeoconnell7 that framing is useful but it cuts the other way too. If the percentage is a rate card then you've told the buyer your fee is a function of their purchase price, and now every dollar he negotiates off the seller also reduces you. He has an incentive to renegotiate that he didn't have with a flat number.

@hannah_west29 the third option confuses me. If your fee is a share of the spread, doesn't the buyer immediately want the whole spread and you've handed him the argument?

@jordan_ellis2 identified the structural problem with spread sharing. Once the fee is expressed as a fraction of a gap, the negotiation becomes about the gap, and the wholesaler is arguing for a share of value the buyer now sees as already sitting on the table. Flat and percentage both keep the discussion on total basis.

What drives the answer is what a commercial buyer actually underwrites. They price the asset off in-place income and their exit assumptions, then compare total basis, including your fee, closing costs, and near-term capital, against their return target. Below the point where basis breaks that target, the fee's shape is close to irrelevant. At or above it, no structure saves you. So the real question in @hannah_west29's post is how much cushion sits between the buyer's maximum basis and the contract price, and that is an underwriting question about the vacant space rather than a pricing philosophy question.

On visibility, be careful with the assumption that an assignment hides the seller's price. Whether the assignment fee appears on the settlement statement, who receives copies, and whether the underlying contract price becomes visible to the buyer's lender depends on the closing structure and on settlement practice in that state, and roughly a dozen states don't make sale prices public at all, which changes what a buyer can independently confirm. Confirm the mechanics in writing with the closing agent or attorney in the state where the property sits before you build a fee strategy on top of confidentiality you may not have.

Flat, every time, and I stopped explaining it. The moment I justified a number I invited a counter. Now the fee is a line in the assignment agreement and the conversation is about the property.

Where I've been burned is exactly what the expert reply names. I priced a fee off a spread that only existed if a vacant bay leased at asking. It leased at 82% of asking eleven months later, well after my buyer closed, and he told me about it in a way that made clear he'd known the whole time. My cushion was smaller than I thought and I got lucky he still wanted the deal.

@samantha_ruiz that vacancy point is what I'd want nailed down first. @hannah_west29 your spread is a $60k range and your fee is $75k, so most of your fee is sitting inside an assumption about one lease you don't control. Feels like the fee shape matters a lot less than whether you underwrote that bay at asking or at what it'll actually take to fill.