A buyer wants the assignment fee disclosure clause struck, and what that decision should turn on

A basic question first. If the seller agreed to 132 and got 132, what is he renegotiating? Is the argument that he would feel cheated, or that he has an actual right to something?

@ehernandez74 it is feelings, mostly. He signed at 132 and 132 is what he gets. But sellers do walk when they feel played, and a walk at day 12 costs everybody. That is why the buyer wants it invisible. Still, a seller who sees the number and stays is a seller who will not call three months later saying he did not understand the deal. The awkward conversation is the better trade.

9k on a 132k purchase is close to 7 percent. That's the number the seller reacts to, not the dollars.

In a small rural market, a 9k fee on a 132k purchase can absolutely blow up at the closing table. Everybody knows everybody and the seller's cousin works at the title office. A metro behaves differently.

Set the threshold by arithmetic rather than by feel. Double closing costs roughly X in points plus Y in fixed fees. Solve for the fee level where paying X plus Y is cheaper than the probability of a blown deal times the spread. If a double close costs 3,800 all in and disclosure kills one deal in six at a 9k average, disclosure costs 1,500 in expectation. Disclose. At 25k the arithmetic flips, which is the opposite of what you said in your post. Go check it.

@hannah_west29 the one in six is invented though. Warrant has no data on how often disclosure kills a deal because he hasn't closed one yet.

@paulgrant17 right, and that is the actual answer for a first deal. Disclose, close it, and find out what the real kill rate is. Buy that information with the first three deals rather than guessing at the structure now.

What does the buyer do if you say no? Four to six a year and he found you, so presumably he has some incentive to stay. Have you tested that at all?

The thing that decides it is which transaction the fee sits inside. If you disclose and the seller renegotiates, you're negotiating against your own contract with a signed price. Legally you're usually fine holding him to it, though whether specific performance is realistic depends on your state and on how much you want to sue a homeowner, which is never. So the clause itself is the smaller exposure. The larger one is that a distressed seller who feels burned has a lot of ways to make the closing slip past your inspection window and leave you choosing between canceling and pushing. Separately, on transactional funding, some lenders in that space want the end buyer's funds confirmed before they'll wire the first leg. If your buyer is genuinely all cash with proof, fine. If he's borrowing, ask early, because the timing between the two legs is where these break.

Keep the clause and tell the buyer why, in writing. If he leaves over it, you have learned something about him for the price of a deal you have not found yet.