Free Novation Agreement Template for Investors
A complete novation agreement package you can fill in today.
- Investor purchase and sale agreement
- New agreement with the third party buyer
- How the original contract ends
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What Is Inside
This free novation agreement template gives you the two part contract package used to sell a seller's home to a retail end buyer. Both parts are in one blank document. It is not legal advice and should be reviewed by a local real estate attorney before you use it.
Part one is the investor Purchase and Sale Agreement. It covers price, earnest money, the inspection period, access, title, closing with buyer paid costs, and disclosures for equity release, profit, assignment, and novation. Part two is a Concierge Service and Novation and Indemnification Agreement. It explains that the investor has marketed the home to a third party buyer, the seller signs a new purchase agreement directly with that end buyer, and the original agreement ends once the new one is signed.
The investor pays for inspections and any agreed repairs, and protects the seller against related claims and mechanics liens. A net proceeds clause sets what the seller keeps, with the rest paid to the investor at closing. If the end buyer fails to close, the original agreement comes back into effect, and a seller default allows specific performance or liquidated damages. Laws differ by state, so have a local real estate attorney review it first.
What it covers
- Investor purchase and sale agreement
- New agreement with the third party buyer
- How the original contract ends
- Investor paid repairs and indemnification
- Seller net proceeds clause
- Reinstatement if the end buyer fails
- Liquidated damages on seller default
Who This Is For
- Wholesalers adding novations as an exit
- Investors who want a net proceeds structure in writing
- Teams who want a starting point to bring to their attorney
Frequently Asked Questions
What is a novation agreement in real estate?
A novation agreement replaces one contract with a new one, with everyone's consent. In investing, the seller's contract with the investor is swapped for a new contract between the seller and a retail buyer. The investor usually earns the gap between the seller's agreed net and the final sale price.
What is the difference between a novation and an assignment?
In an assignment, the investor transfers their contract rights to a new buyer, and the original contract stays in place. In a novation, the original contract is replaced by a new one between the seller and the end buyer. Novations are often used when the home is listed and sold to a retail buyer.
What does a net proceeds clause do?
It sets the amount the seller will walk away with at closing. Anything above that, after costs, goes to the investor. This gives the seller a clear number and is a key part of most novation agreements.
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