Paying a wholesaler's assignment fee BEFORE close of escrow?

[Christina L.]

I’m an investor doing quite a few fix and flip projects in the Phoenix, Arizona area and I’m running into a situation I’ve never before experienced on wholesale deal. The COE date isn’t until August, yet the wholesaler wants his assignment fee to be paid out now, well in advance of the actual close date. The assignment fee would be paid to the title company who would then pay the wholesaler as opposed to me paying him directly. Has anyone ever done this before? It seems like a risky proposition if the seller decides last minute to back out of the contract. I realize there is legal recourse should that happen but still, I’m not sure I want to go down this path. Any advice would be appreciated!

[Mike Flora]

The check to the wholesaler is usually paid through title/escrow and the wholesaler doesn't get paid until close of escrow. If you agree in writing to pay him before COE then go ahead but if it falls out of escrow for some reason then good luck getting that money back. Always pay them at close of escrow. Everyone gets paid when deal is done!