Assignment Fee Bookkeeping: How to Record a Wholesale Deal's Fee in Your Books

What is an assignment fee, in bookkeeping terms?

An assignment fee is what a wholesaler is paid to transfer a purchase contract to an end buyer. It is revenue on that deal, not a reduction of a property cost, because the wholesaler never owns the property.

The wholesaler holds a contract, not a house. No property goes on the balance sheet, so there is no purchase price for the fee to reduce. A double close is the other route: the wholesaler buys and resells on the same day, with two settlement statements instead of one. This page covers the assignment. We record two closings on one deal in double close bookkeeping.

How an assignment fee is taxed is a tax position. The books record the fee and its documents, and your CPA decides the treatment.

When is an assignment fee recorded?

At closing, when the assignment completes and title disburses. Not when the contract is signed and not when the cash clears your bank, which are usually different dates.

The example on this page is Deal 1 for Demo Wholesale LLC, 1807 Example Dr, Woodland. Its numbers are invented data. Deal 1 closed on Jul 14, 2026, so the entry is dated Jul 14, 2026. The earnest money paid on Jun 2, 2026 was recorded on Jun 2, 2026, as a deposit, not as part of the fee.

Why is the money received smaller than the fee?

Title withholds charges from the fee before disbursing: its own fees and anything the deal owes. The fee you earned is the gross amount; record that, and record the withheld charges as costs of the deal.

The three numbers on Deal 1, from its settlement statement.

The $750 is a $450 escrow fee, $250 for document preparation and a $50 wire fee.

The common error is to record $14,250 as the fee. That understates revenue by $750 and hides the costs of the deal. The books record $15,000 of revenue and $750 of costs on Deal 1. The $14,250 reached the bank by wire at closing on Jul 14, 2026.

What happens to the earnest money on the same deal?

It is a separate asset already on your books. At the same closing it is applied or returned, so the entry clears the deposit as well as recording the fee. Two things happen on one statement.

Demo Wholesale LLC paid $1,000 of earnest money on Deal 1 on Jun 2, 2026. From that day it sat on the books as an asset. At the Jul 14, 2026 closing title returned it in a separate $1,000 wire, so the entry clears the $1,000 deposit. It is your own money coming back, not income.

Only the $14,250 relates to the fee. The $1,000 clears the deposit.

A deposit can end in other ways too, such as a refund or a forfeit on a deal that dies. We cover each ending in earnest money deposit bookkeeping.

What documents do you need for the record to hold up?

The assignment agreement, the settlement statement showing the fee and the withheld charges, and the bank record of what arrived. Those three together let anyone reconstruct the entry later.

• The assignment agreement: the fee agreed and who took over the contract.
• The settlement statement: the fee, every charge title withheld, and the earnest money returned.
• The bank record: the bank statement lines showing what arrived.
• If the fee is split: the written agreement with your partner.

What if the fee is split with a partner?

Record the full fee as your revenue if it came to you, then the partner's share as a cost on that deal. Netting it hides both the deal's real size and what the partnership cost.

Suppose Demo Wholesale LLC had shared Deal 1 with a partner who found the end buyer, for an agreed $5,000. The split is invented for this example, on the same invented deal. The full $15,000 came to Demo Wholesale LLC through title, so revenue stays $15,000.

Costs on Deal 1 come to $5,750. Recorded net, Deal 1 would show a $10,000 fee and the $5,000 would disappear. The payment to the partner is its own entry, on the day it leaves the bank.

Whether the partner's share needs a 1099 is for your CPA to decide. We deliver 1099-ready reporting. You or your CPA file the 1099s.

When a partner shares in your deals over time, the books can also report what they put in, what each deal did and what they got back. We cover that in partner capital accounts and private lender reporting.

What does the finished entry look like?

One entry dated at closing: the gross fee as revenue, the withheld charges as deal costs, the earnest money cleared, and the net cash into the bank. It ties to the settlement statement exactly.

The entry for Deal 1, dated Jul 14, 2026.

Every line matches a line on the Deal 1 settlement statement. Debits and credits both total $16,000. The $14,250 and the $1,000 match the 2 wires on the bank statement.

1. 1Date the entry on the closing date shown on the settlement statement.
2. 2Record the gross assignment fee as revenue on the deal.
3. 3Record each charge title withheld as a cost on the same deal.
4. 4Clear the earnest money deposit that title applied or returned.
5. 5Record each amount that reached the bank, and check it matches the bank statement.

The fee then sits on its deal's row in the monthly report, as revenue. To see how that report reads line by line, look at our real estate bookkeeping report example. It is built for a flip company, with invented data.