Assignment fee or separate consulting fee on luxury wholesale deals: the disclosure and licensing tradeoffs
On high end assignments, how a fee gets named tends to change how hard people fight about it, and two structures show up regularly in this space. The plain assignment: the contract allows assignment, the assignment goes to the end buyer for a stated fee, and that fee appears on the settlement statement where everyone involved can see it. This keeps the compliance story simple, which matters when a title company, one or two attorneys, and sometimes a lender are all reading the same file. The tradeoff is visibility. A six figure fee sitting in plain view on a 1.5 million dollar deal can invite a buyer to renegotiate once they see the spread between contract price and purchase price. The separate fee structure: a distinct agreement with the buyer, paid outside or alongside the assignment, framed as sourcing or acquisition work. Advocates argue it keeps the spread from becoming a target and reads more like professional services, which some buyers at this price point actually prefer. The risk is real on two fronts. Anything that looks like structuring around the assignment to obscure the true economics tends to draw scrutiny fast, and depending on the state, a separate agreement to find and negotiate a property on a buyer's behalf can edge into brokerage activity, which is a licensing question with a state specific answer rather than a general one. There is no settled answer here. Which structure makes sense depends on the disclosure comfort of everyone in the file and the licensing rules of the state the property sits in, and both deserve a direct answer from counsel before the fee structure gets chosen.
On a high-end assignment, which fee structure do you use?
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