Properties Needing Repairs
Explore whether a structured sale arrangement could offer a different path than accepting an immediate as-is purchase offer. Costs, timing, and proceeds are evaluated before any agreement.
Arizona Real Estate Novation Specialists
A different way to sell.
More possibilities.
Need to sell a property that requires repairs? Working with a wholesale deal that needs a different exit strategy? A properly structured real estate novation arrangement may create an alternative to a traditional as-is cash sale. The Arizona Real Estate Team helps homeowners and investors explore these opportunities throughout Arizona.
Arizona Homeowners
Real Estate Wholesalers
Value-Add Opportunities
Understanding Novations
What is a real estate
novation agreement?
A novation generally involves an agreement to replace an existing contractual obligation or party with a new one, with the required parties' consent. In real estate investing, the term is also used to describe certain structured transactions where a property may be improved, marketed, and sold to an end buyer under negotiated agreements.
The exact legal structure matters. Not every transaction marketed as a "novation" is a legal novation, and the parties' rights and responsibilities depend on the documents used.
In some arrangements, an investor may coordinate improvements and marketing before a sale to an end buyer. The seller's net proceeds, property access, expenses, marketing authority, and closing arrangements must be clearly documented and reviewed.
Who We Help
Designed for complex opportunities.
Deals With Tight Margins
When a traditional wholesale assignment may not be workable, discuss whether another legally appropriate transaction structure could serve the parties' goals.
Value-Add Opportunities
Evaluate properties where improvements, market positioning, and a different disposition strategy may affect the potential transaction outcome.
Our Process
A structured approach.
Clear expectations.
Review the Property
We discuss property condition, estimated market value, ownership, existing liens, and the seller's goals.
Evaluate the Numbers
We review potential repair costs, holding expenses, resale assumptions, commissions, closing costs, and estimated net proceeds.
Document the Agreement
The parties review the proposed transaction structure, timelines, responsibilities, authorizations, compensation, and contingencies. Independent legal review is encouraged.
Prepare, Market, and Close
If the parties proceed, authorized improvements and marketing are coordinated. A closing occurs only if the contractual conditions are met and the transaction can close lawfully.
Illustrative Example
See how the numbers may work.
Consider a hypothetical property that needs improvements before being marketed to an end buyer.
$300,000
Illustrative resale price after the planned improvements.
$25,000
Hypothetical repair and preparation budget funded under the parties' negotiated arrangement.
Agreement-Based
The seller's net depends on the written agreement, existing debt, transaction costs, and the actual closing figures.
This is an illustration only, not a proposed offer or guaranteed outcome. Actual transaction costs, financing, property condition, market demand, and legal requirements vary.
Frequently Asked Questions
Questions worth asking first.
Is a novation the same as a traditional cash offer?
No. A traditional cash offer generally involves a buyer purchasing the property under an agreed purchase contract. A transaction described as a novation may involve different contractual rights, responsibilities, timing, and conditions.
Who pays for repairs?
That depends on the written agreement. In some arrangements, an investor funds approved improvements, but responsibility for overruns, losses, and reimbursement must be clearly defined.
Does the seller receive a guaranteed amount?
Not automatically. Any promised payment, minimum proceeds, or other financial terms must be expressly stated in the contract. A proposed transaction is not a guaranteed closing.
Can wholesalers bring potential deals?
Yes. Wholesalers can contact our team to discuss potential opportunities. We review the transaction structure, contractual rights, applicable disclosures, and the parties' authorization before proceeding.
Should I have an attorney review the agreement?
Yes. Because these transactions can involve complex contractual and financial obligations, independent Arizona real estate legal advice is strongly recommended.
The Arizona Real Estate Team
Have a property that
needs a different strategy?
Whether you're a homeowner, investor, or wholesaler, tell us about the property and what you're trying to accomplish.
520-664-5818The Arizona Real Estate Team is affiliated with United Real Estate Specialists. This page provides general information and does not constitute legal, tax, or financial advice. Novation-related transaction structures are subject to applicable Arizona law, brokerage requirements, lender restrictions, and the parties' written agreements. No sale price, net proceeds, or closing is guaranteed.