Assigning contracts, also known as wholesaling, is a popular strategy among real estate investors looking to earn profits without purchasing properties outright. While wholesaling is often associated with off-market deals, many investors are discovering that Multiple Listing Service (MLS) properties can also be profitable—if you know how to play the game.
What is Contract Assignment?
In real estate, assigning a contract means entering into a purchase agreement with a seller and then transferring (or assigning) that contract to another buyer for a fee. The end buyer ultimately closes on the property, and the assignor (you) collects an assignment fee for brokering the deal.
Can you assign MLS properties?
Yes, but with caution.
MLS properties are typically listed with real estate agents and may involve stricter guidelines, conventional financing, and seller expectations. Many agents and sellers are unfamiliar with (or uncomfortable with) assignment contracts, so it’s crucial to approach these deals professionally and transparently.
How to Assign MLS Contracts Successfully
1. Find Investor-Friendly Agents
Your first step is to connect with agents who are open to working with wholesalers and investors. These agents can help you identify distressed properties or motivated sellers within the MLS who are more likely to accept creative offers.
2. Look for Distressed or Underpriced Properties
Target listings that have been sitting on the market for 60+ days, need significant repairs, or have undergone recent price drops. These are prime candidates for motivated sellers who might accept flexible terms.
3. Use the Right Language in Your Offers
When submitting offers, ensure your contract includes a clause that allows for assignment. For example:
“Buyer reserves the right to assign this contract without further consent of the Seller.”
You may also want to use an LLC as your buyer entity and then assign the LLC’s rights to your end buyer to avoid red flags.
4. Build a Buyers List First
Having a network of cash buyers—flippers, landlords, or developers—is essential. This ensures that once you have a property under contract, you can assign it quickly and profitably.
5. Negotiate Hard and Leave Room for Profit
Your profit comes from the spread between your contract price and what your end buyer is willing to pay. If the ARV (after repair value) is $300,000, and your buyer wants a 20% profit margin after repairs, you’ll need to negotiate the property at a deep enough discount to make the numbers work for everyone.
6. Disclose Everything
Be upfront with both the seller and your end buyer. Transparency protects you from legal issues and builds long-term credibility in the industry.
7. Know Local Laws
Some states have regulations around wholesaling and assigning contracts. In certain areas, you may need a real estate license or may be restricted from advertising properties you don’t own. Always check local laws or consult a real estate attorney.
Example Scenario
- You find an MLS property listed at $170,000.
- It needs $30,000 in repairs.
- The ARV is $260,000.
- You negotiate the price down to $150,000 and get it under contract.
- You assign the contract to a cash buyer for $160,000.
- Your profit is a $10,000 assignment fee—without ever owning the property.
Risks and Challenges
- Agent resistance: Some agents may push back on assignment deals or try to include anti-assignment clauses.
- Timing: MLS deals move fast. You must act quickly and have buyers lined up.
- Market competition: Since MLS properties are public, you’re competing with retail buyers, investors, and flippers.
Final Thoughts
Assigning contracts from MLS properties is entirely possible—and profitable—with the right strategy, knowledge, and relationships. While it’s not as straightforward as off-market wholesaling, leveraging the MLS provides you with access to a massive inventory of potential deals. By positioning yourself as a problem-solver and being prepared to navigate agent expectations, you can build a successful and sustainable real estate business.
Frequently Asked Questions
Can you assign a property that is listed on the MLS?
Yes, you can assign a contract on an MLS-listed property, but it requires careful navigation. Since MLS listings involve real estate agents and formal agreements, some sellers or agents may not be open to assignment contracts. To do this successfully:
- Include an “assignment clause” in the contract.
- Consider purchasing through an LLC to simplify assignment.
- Communicate transparently with the listing agent to avoid misunderstandings.
However, some contracts may contain “non-assignable” language, so it’s important to review all terms thoroughly.
How do you find MLS properties suitable for contract assignment?
Look for undervalued or distressed properties on the MLS using filters such as
- Days on Market (DOM): Properties listed for 60 days or more are often negotiable.
- Price Drops: Repeated reductions can indicate a motivated seller.
- Keywords: Listings that include “as-is,” “investor special,” “fixer,” or “needs work” are often good candidates.
- Vacant or Out-of-State Owners: These sellers may be more open to creative terms.
Having an agent who understands investment strategies can help you spot these opportunities more effectively.
How do you structure an assignment contract for an MLS property?
Assignment deals typically involve two agreements:
- Original Purchase Agreement (OPA): Between you and the seller. This must include an assignment clause, and the buyer field can be written as “Your Name and/or Assigns” or use an LLC.
- Assignment Agreement: Between you and your end buyer. This outlines the assignment fee and transfers your contractual rights.
It’s wise to have both documents reviewed by a real estate attorney to ensure compliance, especially when agents are involved.
What should you say to a listing agent when making an offer you plan to assign?
Be professional and clear without over-explaining. A good approach might be
“I work with a group of real estate investors. I’d like to make an offer through my LLC, which may be assigned to one of my partners depending on the project’s fit. We’ll move quickly with a clean close. Is the seller open to this type of offer?”
This shows you’re serious, minimizes confusion, and maintains your reputation with agents.
How much money can you make by assigning a contract?
Assignment fees vary widely depending on the market and the deal.
- USD 5,000 to USD 10,000 is common for residential properties.
- USD 15,000 to USD 25,000 or more is possible for larger or more complex deals.
- Some wholesalers earn USD 50,000 or higher on commercial or multi-family deals.
Your profit depends on how well you negotiate the original purchase price and the demand among your buyers.
What legal issues should you be aware of?
Key legal concerns include:
- Licensing Requirements: Some states require wholesalers to hold a real estate license.
- Disclosure: Always inform all parties of your intent to assign the contract.
- Marketing Restrictions: In many areas, you cannot market a property unless you own it—you can only market your contractual interest.
- Anti-assignment Language: Some MLS contracts prohibit assignments. Always read the fine print.
Consulting a local attorney is highly recommended to ensure you’re following all applicable laws and regulations.
What happens if you can’t find an end buyer before closing?
If you cannot assign the contract in time, your options may include
- Exercising a contingency clause to cancel the contract without penalty (if applicable).
- Requesting an extension from the seller to allow more time to find a buyer.
- Closing on the property yourself using transactional or hard money funding, if feasible.
- Backing out of the deal, which may mean losing your earnest money deposit.
To avoid this scenario, always have a strong buyer’s list and multiple backup options.
