What is novation?
A contract change in which one party is replaced by another, with everyone's written agreement. Some wholesalers use a novation agreement so they stay in the deal while a new buyer takes over; the rules differ by state, so ask an attorney.
Why it matters to an investor
A novation replaces a party in a contract with everyone's written consent. A few wholesalers use it to stay in a deal without taking title, but it is an advanced tool and state rules differ.
How investors use it
- Treat it as an attorney topic, not a template.
- Read your state's rules on marketing a property you do not own.
- Prefer plain assignment or a purchase if you are new.
Questions
Is a novation the same as an assignment?
No. In an assignment the buyer takes your place and you leave. A novation is a three-way agreement where a new party replaces another, and the details are set in the contract.
Is it allowed everywhere?
Rules differ by state and change. Check your state regulator and an attorney.
How we make these guides
Written by the LeadCounty editorial and data team from official county, court and state sources and our own weekly counts. We name the office behind every number, say what we cannot see, and fix mistakes when you tell us. See our editorial standards and methodology. General information, not legal or financial advice. Refreshed weekly.
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