Novation

In real estate investing, a novation is an agreement that replaces an existing purchase contract with a new one, typically letting an investor partner with a seller to repair and list the property on the open market, paying the seller an agreed price and keeping the difference.

Last reviewed October 26, 2026 by the Trident team.

What is a novation in real estate?

A novation replaces an existing contract with a new agreement between the parties. In investor deals, it usually means the investor and seller agree that the investor will fix up and market the property, often on the MLS, to a retail buyer. The seller gets an agreed price and the investor keeps the rest.

Why do investors use novation agreements?

Novation can unlock deals where the house is worth more than a cash buyer would pay but the seller cannot repair or list it themselves. Selling to a retail buyer at full market price can give the seller more than a cash offer and the investor a bigger spread than a wholesale fee.

What are the risks of a novation?

The seller stays the owner until closing, so the investor's money spent on repairs is at risk if the seller backs out or the property does not sell. Some states treat marketing a property you do not own as brokerage that needs a license. Use clear written terms and a real estate attorney.

How does Trident handle Novation?

Trident's Deal Command Center includes a Novation MAO lane next to wholesale and flip, so you can see whether a retail sale beats a cash exit before you make the offer. Plans start at $99 a month with a usage credit included, and every action after that has a published rate.

See pricing for plans and per-use rates, or try Trident for 7 days for $8.

More terms: Skip tracing, ARV (after repair value), MAO (maximum allowable offer), Assignment fee, Wholesaling, Subject-to, BRRRR, Pre-foreclosure, Absentee owner, 10DLC, Double close.

General information, not legal, tax or financial advice.