What Does “Assignment of Contract” Mean in Real Estate?

What Does “Assignment of Contract” Mean in Real Estate?

If you’ve been exploring real estate investing or heard someone talk about “assigning a contract,” you might wonder what that really means, and whether it’s something that affects you as a buyer or seller. Let’s break it down in simple terms.

What Is an Assignment of Contract?

An assignment of contract happens when the original buyer (the assignor) transfers their rights and responsibilities under a purchase agreement to a new buyer (the assignee).

In other words, the first buyer finds a property, puts it under contract with the seller, and then “assigns” that contract to someone else before closing. The new buyer steps in and completes the purchase, often paying the assignor a small assignment fee for finding the deal.

Who Is the Assignor?

The assignor is the original buyer — the person who initially entered into the purchase contract with the seller. They’re the one who assigns or transfers that contract to someone else.

Who Is the Assignee?

The assignee is the new buyer — the person taking over the contract from the original buyer. The assignee fulfills all the terms of the contract, including closing on the property.

When Is an Assignment of Contract Used?

Assignments are common in real estate investing and wholesaling, where one buyer identifies a great deal and then passes it along to another investor or buyer who will actually close on it.

However, not all contracts allow assignments. Some sellers or builders prohibit them, or they may require written consent before an assignment can take place.

What Sellers Should Know

If you’re a seller, understanding assignments is key. It’s important to know whether your buyer intends to purchase the home themselves or assign the contract to someone else. Your agent can help you review the contract terms and ensure everything is transparent and compliant.

What Buyers Should Know

If you’re buying a property through an assignment, make sure you understand what you’re taking over — including timelines, inspections, and financing conditions. Work closely with a knowledgeable agent who can guide you through the process and protect your interests.

The Bottom Line

An assignment of contract can be a useful tool in real estate, but it’s important to know who’s who and how it works.

• Assignor = Original buyer

• Assignee = New buyer taking over

• Seller = The property owner

Whether you’re a buyer, seller, or investor, having the right agent by your side ensures everything goes smoothly, and that you fully understand your rights and obligations every step of the way.