When the deal falls apart

Bird Dogs, Wholesaling
1

I apologize if this question has been asked before, but I couldn’t find anything with a search.

I generally specialize in rehabs, but my roofing/siding guys are interested in buying a rehab I’m about to close on. The closing has been delayed several weeks due to legal issues for the seller (an improperly set-up LLC which triggered a state-imposed fine). The way I was looking at things was I could either close on the house first (for $10k) and sell it immediately for say $35k, or I could assign the contract for say $20k and give them the contract for $10k. I don’t think the assignment fee would be an issue, what I am concerned about what to do if the seller flakes out and my contractor can’t close on the house. Do I just give back the assignment fee? What do wholesalers usually do if a deal falls through?

2

Yes, you should give back the assignment fee if the seller flakes out. I think you would expect the same. Many times a buyer who is paying an assignment fee does so at closing to prevent them for getting caught with an assignment fee when the seller doesn’t perform.