Assignment vs. Double Closing in Texas: Which Is Better for Wholesalers?
Every Texas wholesaler eventually has to choose how to get paid: assign the contract to the end buyer, or buy and resell the property in a double closing. Both are legitimate and both close at a title company, but they differ in cost, privacy, funding and which buyers they work for. Here is a side-by-side comparison and a simple way to decide on each deal.
The Short Answer
Assign when your fee is modest, the contract allows assignment and the end buyer is paying cash. Double close when your spread is large, the seller or buyer would object to seeing it, the contract cannot be assigned, or the end buyer's lender will not accept an assigned contract.
How an Assignment Works
You sign a purchase contract with the seller, then sign an assignment agreement that transfers your rights as buyer to the end buyer for a fee. There is one closing: the seller deeds the property straight to the end buyer, and your assignment fee is paid at closing from the buyer's side of the settlement statement. You never take title and you need no money for the purchase.
How a Double Closing Works
You buy the property from the seller (A-B) and sell it to the end buyer (B-C), usually on the same day. There are two closings, two settlement statements and two deeds, and you need funds for the A-B purchase, often from a transactional lender. Each party sees only its own price. Our double closing guide walks through every step.
Side-by-Side Comparison
- Closing costs: an assignment has one set; a double close has two, plus any transactional funding fee.
- Privacy: an assignment fee appears on the buyer's settlement statement; in a double close, neither side sees your spread at closing.
- Funding: an assignment needs no purchase money; a double close needs A-B funds.
- Buyer financing: many mortgage lenders will not lend on an assigned contract or limit the fee they accept; a double close gives the lender a normal purchase from the owner of record.
- Contract limits: some contracts, including many bank-owned and short sale contracts, prohibit assignment, which leaves a double close as the option.
- Speed: both can close quickly once title is clear; a double close also depends on funding being ready.
A Simple Way to Decide
Ask your title company for an estimated settlement statement both ways. Subtract the second set of closing costs and any transactional funding fee from your spread. If what is left is still worth the privacy and the wider pool of financed buyers, double close. If not, assign. Many wholesalers set a personal threshold and double close anything above it.
Texas Rules That Apply to Both
Texas requires anyone marketing a property they have under contract but do not own to disclose to buyers that they are selling only an interest in a contract, and wholesaling rules have been tightened in recent legislative sessions. Use written disclosures in every deal, keep your marketing honest about what you hold, and have a Texas real estate attorney review your contracts and assignment forms. Your title company will also need to see every contract and assignment in the chain.
Frequently Asked Questions
Can I switch from an assignment to a double close?
Usually yes, if you tell your title company early. You will need a separate B-C purchase contract with the end buyer and funding for the A-B side, and the assignment agreement is cancelled.
Is there a maximum assignment fee in Texas?
Texas law does not set one, but the end buyer's lender may. Some lenders cap the fee they will allow or refuse assigned contracts entirely, which is a common reason to double close.
Do I need title insurance in a double close?
The end buyer will normally receive an owner's policy on the B-C side. Whether a policy is issued on the A-B side depends on the deal and on your transactional lender, so ask your escrow officer when you open the files.
Close Either Way With Cottonwood Title
Our Sugar Land and Allen offices close both structures for Texas wholesalers. See our assignment closing services or our double closing title services to open your next file.