I'm a bit surprised by the distaste of wholesalers in general on this thread.
To the answer the original OP, my assignment fee is usually disclosed once I send my Assignment Contract to be signed which outlines my fee along with the original executed Purchase Agreement. As stated in this thread, the assignment fee will be on the ALTA, and if the buyer does not approve the closing statement, then it does not close.
Most buyers I deal with do not care how much the assignment fee is if the numbers work. However, if the buyer is asking for $5k less than what your price is and you decline, I could understand some hesitance on working with you again if at closing they see you are making a $25k assignment.
Although I do invest myself, I have several positive reviews from both buyers and testimonials from sellers I've worked with. However, I can understand how some investors may have a bad rap with wholesalers because I would imagine for every 1 ethical wholesaler, there are 10 unethical ones as well.
As @Chris Clothier stated, wholesalers spend countless dollars along with man hours to create these deals for investors. Chris made a good point that unlike most realtors who wait for listings, wholesalers are constantly talking to sellers and if we don't respond fast enough, we may lose the deal. The work doesn't stop there, either. I've been in many situations where I had to re-negotiate with the seller the day of closing because the mortgage payoff was higher than expected, or because they needed additional days to move out. I've had to connect sellers with my agent to find a new home, we've even moved furniture out for a seller.
Wholesalers offer several services that, for whatever reason, a realtor can't provide them. I recently assigned the contract for a $290k home outside of Memphis that was contracted at $185k and assigned for a total of $195k. This lead came thru our website and I called the seller immediately. He specifically did not want to work with an agent as he wanted to move as soon as possible and did not want to deal with showings where he would have to leave the house in order for it to be shown to a potential buyer. He also did not want to deal with potential mortgage backed buyers not being able to close 30-45 days into the contract.
In my opinion, the general "teaching" of wholesaling needs to be revised. I use to tell sellers I'm going to buy their house with cash and close in 7-10 days. This would put me in a time crunch and upset sellers if I didn't perform in the time frame given. I will still approach in this method, but only if the buyer I am dealing with has agreed upfront to a certain price I can make my offer based around, or if I have the cash myself to close with.
Wholesalers, in my opinion, should be explaining thoroughly to sellers what they intend to do, which is present the deal to their network of cash buyers. In the event of not being able to find a buyer, there is less chance of an upset seller when you need to walk away.
I've worked with both wholesalers that I couldn't stand as well as realtors that seemed more clueless about real estate than the seller. Although I work with some very successful agents, there are several out there who seem to be self entitled and "know it alls" because they took a 2 day course.
We, as in wholesalers, agents, investors, flippers, are in the business of making money. We're not here looking to move into a new home. You never know what situation a seller is going thru that they are willing to accept 50% of what their home is worth. If you feel that it is unethical, then don't buy the deal, but there will always be someone waiting to snag it out from under you!
