MLS and Novation Strategy · The Cowboy Sales Process

To provide a clear, actionable guide for real estate investors on leveraging Novation agreements combined with the Multiple Listing Service (MLS) to close more deals, generate higher profits, and unlock the hidden value in their existing lead lists.

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1. The Core Problem: Your CRM is a Goldmine You Can't Access

Every investor has a CRM filled with "dead" leads. These are sellers who weren't desperate enough to accept a lowball wholesale offer but still had an interest in selling. You couldn't make the numbers work for a traditional wholesale, fix-and-flip, or rental, so the lead went cold.

The fundamental limitation of traditional wholesaling is your buyer pool. You are selling to a small subset of the market: cash buyers. These buyers need a deep discount because they are often just the middlemen—they buy from you, then turn around and list the property on the open market (the MLS) for a retail price.

The Strategy outlined here allows you to cut out that middleman, go directly to the largest pool of buyers, and create a profit spread on deals that 99% of investors are throwing away.

2. The Solution: Combining the MLS with a Novation

This strategy merges two powerful concepts:

The MLS Strategy: Gaining access to the entire retail market by listing the property on the Multiple Listing Service. This exposes the deal to thousands of conventional, financed buyers who are willing to pay top dollar.

The Novation Agreement: This is the legal tool that makes it all possible. It’s the exit strategy that allows you, the investor, to control the deal and get paid without ever owning the property.

3. Novation Agreements

A Novation is not an assignment. It's not a double close. Understanding the difference is critical.

Let's break down how you appear on the final closing statement (the HUD-1) for each exit strategy:

The Linchpin of the Strategy

The Linchpin of the Strategy

Assignment:

Column 2

Double Close:

Column 2

Novation (The Power Position):

Column 2

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This is a powerful distinction. With a novation, you are managing the sale for the original seller and directing the proceeds. This structure is cleaner, avoids financing issues related to assignment fees, and keeps you out of the chain of title.

4. Execution: Pitching the Seller & Setting Expectations

Complexity kills deals. When presenting this to a seller, drop the industry jargon like "equity protection program" or "concierge service." Frame it simply as the "Two Cash Offers" approach.

You present your standard, lower cash offer first. When the seller hesitates, you introduce the second option.

Your Pitch:

"Mr./Mrs. Seller, I can give you my cash offer of $X, and we can close in 14 days. Or, if you have a bit more time, I have a strategy where I can market the property to a larger pool of buyers and get you a price much closer to $Y. It will take a little longer, but it will put significantly more money in your pocket."

To execute this, you must set three clear and non-negotiable expectations from the beginning:

We Need More Access: "Because we will be showing the property to retail buyers, we will need more access to the home than if I were just buying it myself."

We Need a Longer Timeline: "This isn't a 14-day close. Selling on the open market takes time for showings, inspections, and buyer financing. We need to plan for a 60-90 day timeline."

We Need a Pre-Marketing Clause: Your agreement with the seller must include a clause that gives you the explicit right to market the property for sale before you have officially purchased it. This is the legal foundation for the entire strategy.

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5. Leveraging the Right Brokerage (A Critical Component)

Getting the property on the MLS requires a licensed real estate broker. Your choice of partner here will make or break your profitability.

Brokerage Models:

Brokerage Models:

Name

Notes

The Traditional Realtor:

Open

The Flat-Fee Company:

Open

The Investor-Focused Subscription Model (The Ideal Partner):

Open

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This model allows you to "shoot your shot" on multiple deals without accumulating per-listing fees, dramatically reducing your risk.

6. Summary & Action Plan

This Novation + MLS strategy is a paradigm shift. It allows you to:

Monetize Dead Leads: Turn your "no" pile into a new revenue stream.

Mitigate Risk: Sell to the entire market instead of a small list of cash buyers.

Increase Profits: Cut out the middleman (the cash buyer) and keep that spread for yourself.

Provide a Better Solution: Offer sellers a way to get more money for their homes, creating a true win-win scenario.

Your Action Plan:

Review Your CRM:

Identify all leads that were not motivated enough for a wholesale offer but still wanted to sell. These are your prime candidates.

Refine Your Contracts:

Work with an attorney to add a clear and enforceable pre-marketing clause to your purchase agreements.

Find Your Brokerage Partner:

Vet local or national investor-friendly brokerages. Inquire specifically about subscription-based listing models.

Drill Your Pitch:

Practice the "Two Cash Offers" approach until it's second nature. Focus on simplicity and the core value proposition for the seller: more money in their pocket.

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The Cowboy Marketer⁠

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