The first time a title company told me I couldn't assign a contract, I had no idea what they were talking about. I had a signed deal, a buyer ready to fund, and a payday lined up. Then the closer said "this one needs to be a double close" and I nodded like I understood while panicking on the inside.
I figured it out the hard way over the next few deals. Most wholesalers learn assignment first because it's simpler and cheaper, and then they hit a wall where assignment doesn't work and nobody warned them. So let me lay out both, when each one fits, and the specific situations that take the choice out of your hands.
What Each One Actually Does
An assignment is the clean version. You put a property under contract with the seller, then you sell your position in that contract to an end buyer for an assignment fee. You never own the property. At closing, the buyer pays the seller the contract price and pays you your fee, and your name comes off the deal. One closing, one set of fees, your spread shows up as an assignment fee on the settlement statement.
A double close is two separate transactions, usually back to back on the same day. You actually buy the property from the seller (the A-to-B transaction), and then you immediately sell it to your end buyer (the B-to-C transaction). You take title, even if only for a few minutes. The seller sees what you paid them. The buyer sees what they paid you. Neither one sees the other side of the deal.
That last sentence is the whole reason double closes exist. Privacy. In an assignment, your fee is sitting right there on the closing statement for everyone to see. In a double close, the two transactions are separate, so the seller never finds out you flipped their house for forty grand more an hour later.
The Cost Difference Is Real
Assignment is cheap. You pay your normal closing costs and that's basically it. The whole appeal is that it's one transaction with one set of fees.
A double close costs more because you're funding an actual purchase and then a sale. You've got two sets of closing costs, sometimes two title policies, and most of the time you need money to fund the A-to-B side because you're buying before your end buyer's money arrives.
That funding usually comes from transactional funding, also called same-day or flash funding. A lender fronts the money for the A-to-B close, and it gets paid back out of the B-to-C close the same day. It's short term, sometimes just hours, so it's expensive on a percentage basis but cheap in absolute dollars. I've seen it run anywhere from a flat fee of around a thousand dollars up to one to two percent of the purchase, depending on the lender and the deal size. On a deal where I'm making thirty or forty grand and the alternative is the deal blowing up, paying fifteen hundred to flash-fund it is not a hard decision.
So the math is simple. Assignment when you can, double close when you have to or when the privacy is worth the extra cost.
When Title or the Lender Forces a Double Close
Here's the part nobody tells new wholesalers. Sometimes the choice isn't yours.
The most common one is the seller's lender. A lot of bank-owned properties, short sales, and HUD deals have a clause that says no assignment and no resale within a certain window, often ninety days. If you try to assign one of those, the deal dies. You either double close or you walk. This is why that title closer told me no, that property had deed restrictions that killed the assignment.
Another is when your assignment fee is large enough to spook the seller. If you're assigning for a fee that's a huge fraction of the purchase price, and the seller sees it on the settlement statement, they can get cold feet or feel cheated and blow up the closing. A double close keeps the numbers separate so the deal survives. Big spread plus an emotional seller is a classic double-close situation.
Then there's the end buyer's lender. Some lenders won't fund a purchase from someone who isn't on title, which kills an assignment. If your buyer is getting institutional financing rather than paying cash, ask early whether their lender allows assigned contracts. A lot don't. You don't want to find this out three days before closing.
And sometimes the title company just won't do assignments at all, as a policy. That's their call, and arguing rarely works. Either find a more investor-friendly closer or plan for the double close.
Disclosure Is Not Optional
I want to be blunt here because this is where wholesalers get themselves in trouble.
The privacy of a double close is a legitimate business reason, but it is not a license to hide the fact that you're a wholesaler. In a growing number of states, you are legally required to disclose that you are entering into a contract for the purpose of assigning it or reselling it, and that you don't intend to be the end owner. Some states now require you to disclose your interest in writing and even put a cap or registration on wholesale activity.
So disclose that you're an investor who may assign or resell. Put it in your contract. Tell the seller you're not the final buyer. The double close protects the numbers, not the nature of what you do. Hiding the spread is fine. Hiding that you're a wholesaler is how you end up on the wrong side of a state attorney general.
Check your specific state's rules, because they've been changing fast over the last couple of years, and what was legal three years ago might require a license now.
How I Actually Decide
My default is assignment. It's cheaper, it's simpler, and most deals don't have a reason to be anything else. I start every contract assuming I'll assign it.
I switch to a double close when one of four things is true. The contract or property has anti-assignment language. The spread is big enough that showing it would blow up the deal. The end buyer's financing won't allow an assigned contract. Or the title company won't process an assignment.
The tell that I might be heading toward a double close usually shows up early, in the property's history. A property that was recently bank-owned, that's been through a foreclosure, or that has an unusually motivated seller with a thin spread on their end, those are the ones where I check the contract language and the buyer's funding before I get attached to assigning it. I pull the ownership and transaction history on every lead anyway in PropQuest, so the red flags that point toward a double close tend to surface before I've written the contract, not after.
Both tools get you to the same place, which is paid. Assignment is the one you'll use most. The double close is the one that saves the deal when assignment can't, as long as you've lined up the transactional funding and disclosed who you are. Learn both before you need them, because the day you find out you can't assign a contract is a bad day to be learning what a double close is.
