In the ever evolving state of the economy – including fluctuating interest rates, or even in a scenario where a purchaser has a property under contract that no longer makes sense for such purchaser to buy based on, for example, property condition, encumbrances, or zoning – a purchaser's usual initial reaction is to simply terminate the purchase agreement prior to the expiration of the diligence period and walk away from the transaction. However, in the process of such unilateral termination, a purchaser is generally out all of its costs expended to such termination date, including the negotiation of the purchase agreement, conducting due diligence, attorneys' fees, and working through any rezoning or plan approval. Alternatively, there are scenarios where a purchaser has secured a "deal" on a property with no intention to close, but such purchaser enters into a purchase agreement in hopes of turning a quick profit by locating a final purchaser.  In both of these scenarios, there are actions that can be taken by a purchaser to mitigate costs or even allow for a substantial gain to the original purchaser via an "assignment fee."

The two most common transaction structures to obtain an assignment fee fall under the following scenarios.

Assignment