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The Novation Strategy
This lesson is about the Novation—one of the most misunderstood and profitable exit strategies in the game.
We’re not talking about some abstract legal theory. We’re giving you a tactical guide to a strategy that gets sellers more money, solves problems that a simple cash offer can't touch, and creates a wider profit spread for you. Master this, and you’ll close deals that your competition has to walk away from.
1. DECONSTRUCTING THE NOVATION: BEYOND THE BUZZWORD
A novation isn't magic. It's an exit strategy. Let's be brutally clear on that point. It belongs in the same toolkit as your other exits:
The core of a novation is substituting one contract for another. But in the trenches, it’s about controlling a property and then using the largest buyer pool on planet earth—the MLS—to secure a top-dollar price.
The Critical Misconception:
The second you mention the MLS, inexperienced investors panic. They think: "Listing on the MLS = Novation."
This is dead wrong.
Listing a property is a marketing action. The novation is the legal and logistical framework that allows you to execute that action for a profit without owning the property in the traditional sense. It's about how you exit, not just where you market.
2. THE MLS STRATEGY
Why is the MLS so damn powerful? Because it's not a list of your typical cash buyers. It’s the gateway to an entirely different class of buyer.
YOUR UNFAIR ADVANTAGE
Your Cash Buyer List:
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The MLS Buyer Pool:
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The MLS Strategy
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3. CONQUERING THE SELLER: PITCHING THE NOVATION
Your biggest obstacle will be the seller's immediate question: "Why wouldn't I just list it with an agent myself?"
If you can't answer this with absolute conviction, you've already lost. Your inability to answer this reveals you don't understand the true value you're bringing. Here’s the reality: you are offering a hybrid solution that a typical agent cannot.
You are providing a solution for sellers whose properties or situations don't fit the neat boxes of a "cash offer" or a "traditional listing."
The Value Proposition:
Name
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This isn't just for pristine houses. It's for sellers who need a specific outcome that the rigid, traditional models can't provide. Your job is to set these expectations on the front end. You're not just an investor; you're a strategic partner.
4. THE PROFIT EQUATION
This is where the strategy becomes undeniable. Let's look at the numbers.
MORE FOR THEM, MORE FOR YOU
Scenario A: Traditional Wholesale
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Scenario B: Novation via MLS
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This is the definition of a win-win. It is an ethical, high-value solution that serves your client's best interest while maximizing your own profit. By employing the Novation strategy, you move from a single-solution provider to a multifaceted problem solver, equipped to generate profit in situations where others can't.
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