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Thank you very much, Clint. What a great explanation and generous sharing of the clauses.

@ClintCoons

2 жыл бұрын

You are very welcome

Mad respect for you for always making quality content.

HI FROM ITALY! In Latin, Novation, is "to make something anew" . In Italy law Novation is a new agreement: same terms as previous agreement but different parties. This is because if one of the main elements of a contract (terms, subject, parties) change, it is considered that the previous contracted is "resolved" into a new one. In this new one, there are different parties. Contracts with the Government have different rules, but that is Administrative law.

Wow. Love it! Thank you very much

@ClintCoons

2 жыл бұрын

Steve H Thanks for watching.

Do you have a net proceeds form that would show the title company how to disperse funds once closed? I guess what I’m thinking is if the new purchase and sale agreement is between investor and buyer how do I get paid?

Great content, very quality information that will be helpful when I decide to do my first novation deal. I appreciate it, thank you 🎉🏀🎉🏀

@ClintCoons

6 ай бұрын

Thanks

Clint you're inspiring me to get in the gym!

@clintcoons The link in your bio with the sample doc how can we gain access to the full doc? Any way we can buy it?

Good content. So when Novating I'd need to have another PSA with the novation clause with the buyer? Will I need to use 2 PSA's for one property?

Love the way you walk through the examples. Great instructor, great video!

Hi Clint, one of the better explanations of the difference between assignment and novation - thank you for that, I was struggling to get that from some of the mentorship folks out there. One thing, the google drive link in the notes for the language isn't working. Is there an updated link you can share for that? Thank you!

@ClintCoons

Жыл бұрын

The link works but here is the language Original Purchase and Sale Agreement Novation Clause (a) From and after the date of this Agreement, the Purchaser shall have the right, with or without the consent of the Seller, to assign all of its rights and obligations under this Agreement, effecting a novation, to a third party (the "Assignee"). Such assignment shall become effective immediately upon notification by the Purchaser to the Seller of such assignment. (b) In the event of a transfer of the rights and obligations of the Purchaser under this Agreement the Seller: (i) agrees that such a transfer shall not constitute a default by the Purchaser or any third party under this Agreement and shall not constitute grounds for termination of this Agreement by any of such parties; (ii) anything to the contrary herein notwithstanding, consents to the transfer of all the rights and obligations of the Purchaser under this Agreement (including, without limitation, its obligations pursuant to _____________ (include contract sections detailing the sale of the property and terms) hereof) to a third party; (iii) within 3 days of being notified of a transfer of right by Purchaser, agrees to enter into a Purchase and Sale Agreement on the same terms as this Agreement with the Assignee, and (iii) anything to the contrary herein or elsewhere notwithstanding, agrees to absolutely and irrevocably release the Purchaser from its obligations under this Agreement. New Purchase and Sale Agreement with Assignee NOVATION OF THE SALE AND PURCHASE AGREEMENT On and with effect from the date of this Agreement: (a) the Original Purchaser on the one part and the Seller on the other part hereby irrevocably and unconditionally release and discharge each other from any and all obligations and liabilities under the Purchase and Sale Agreement and the Seller accepts the liability of the New Purchaser under the Purchase and Sale Agreement in place of the liability of the Original Purchaser and the Seller agrees that the New Purchaser has the rights of the Original Purchaser under the Purchase and Sale Agreement in each case from the date of the Purchase and Sale Agreement as if the New Purchaser were and at all times had been an original party to the Purchase and Sale Agreement in place of the Original Purchaser; and (b) the New Purchaser agrees to be bound by the terms of the Purchase and Sale Agreement and to perform the obligations of the Original Purchaser thereunder in every way as if it were an original party to the Purchase and Sale Agreement in place of the Original Purchaser; and 3. AMENDMENT OF SALE AND PURCHASE AGREEMENT On and with effect from the date of this Purchase and Sale Agreement the parties hereby agree that the Purchase and Sale Agreement shall be amended as set out in clauses 4 to 18 of this Purchase and Sale Agreement.

Thank you!

I was under the impression that a " Novation" was when we put a deal under contract and came in with our own money to rehab the property putting it up on the MLS after repairs and selling it for MAX ARV...putting more money in the sellers pocket VS buying it at a cash price.

@johnPxIV

3 ай бұрын

That could be one way. Novation has multiple avenues. "Nova" just means "new" in Latin. You're replacing yourself with a new buyer, or replacing the contract with a new contract.

What is "clauses 4 to 18 " at the end of this Novation clause?

Thanks for the great content. This really educated me and help me understand in a simplistic way. Question: I know investors using this notation strategy to sell wholesale deals on mls. How does that work?

I use an option to buy realty contract. The option has an attached PSA that is signed and acknowledged by all owners of record; the buyer signature is blank. The option has an explicit assignment clause that relieves me of all liability when I assign the option to a 3rd party assignee. When the then-current optionee exercises the option by countersigning the PSA in the presence of the Escrow Agent, the buyer and seller are the original signatories to the PSA.

@akay5036

8 ай бұрын

Could you send what the verbiage for something like this would look like?

Still a legend thanks for the information!!

@ClintCoons

2 жыл бұрын

Happy to help!

Thanks for the no BS & great content video Clint! I'm an investor that just got my RE license. Can I get a PSA with a novation clause and then list it on the MLS to find the buyer?

@ClintCoons

Жыл бұрын

Not sure - I would check with your board on wether it is possible. My gut tells me no.

Great video Clint, when listening to Pace Morby I thought Novation agreement was an agreement between the seller and the "buyer"(investor) to rehab the property without going through the purchase stage and when finished with the rehab the the property can sell to the open market at top dollar having the client (seller) carry his current note (if any) until the project is finish benefiting the investor from getting a HML and paying closing cost and all ? Is this wrong? or just not structured correctly ?

@ClintCoons

2 жыл бұрын

Yes I watched Pace's video as well and I think we is building the ability to reahb etc.. into his REPSA. The novation part prevents the seller from changing the terms when the rehabber finds a buyer. I will ask him next time we chat.

Clint - first off, great video! I'm a broker in FL and this is the verbiage in our PSA regarding assignability: 7. ASSIGNABILITY: (CHECK ONE): ____ Buyer may assign and thereby be released from any further liability under this Contract; ____ may assign but not be released from liability under this Contract; or ____ may not assign this Contract. IF NO BOX IS CHECKED, THEN BUYER MAY NOT ASSIGN THIS CONTRACT If we're checking option 1, doesn't that release us from the liability?

@ClintCoons

8 ай бұрын

Yes - great clause

At the bottom of your novation example you have a clause "On and with effect from the date of this Purchase and Sale Agreement the parties hereby agree that the Purchase and Sale Agreement shall be amended as set out in clauses 4 to 18 of this Purchase and Sale Agreement." What are clauses 4 to 18? Should we leverage your P&S so the language aligns?

@Prizelife

5 ай бұрын

I am asking the same question , what is "clauses 4 to 18 "

Awesome Video. Thank you. Quick question, can you take the Novation Agreement and sell it on the MLS market?

@ClintCoons

Жыл бұрын

I do not think so because you do not own the property.

@stevemallorytshenterprises2371

Жыл бұрын

@@ClintCoons Our MLS does allow a non-owner listing, but each one has its own rules and each state may vary. I'm in NC.

Hey Clint, been really enjoying your videos. The phrase "same terms" is throwing me off a little. By terms are you referring everything besides the purchase price? I've heard great things about novations because of the ability to bring in a conventional or even FHA buyer, so I'm confused about how to go about that and how we'd get paid out if the contract has the same terms. I imagine the second contract has a higher price, and then the fee is therefor paid out of the sellers proceeds rather than by the buyer as it would with an assignment. Would it just be a matter of using the right language in the novation clause to allow for the financing terms to change? TY

@ClintCoons

Жыл бұрын

The novation agreement keeps the original contact in place (all terms including price) and allows you to substitute out for a third party. You are released from any obligations under the agreement.

Would the inclusion of a Novation Clause then remove the desire to use a separate entity per deal ( due to the removal of liability )?

@ClintCoons

Жыл бұрын

No you should still use a separate entity to set up the deal.

Clint! Thanks for the video. Would you be willing to share your contract that you have for novations? Located in St. Petersburg, FL. Happy to pay for your counsel. Thanks!

@ClintCoons

2 жыл бұрын

David I do not have a contract for novations just the clause you could incorporate into your existing REPSA. I suggest contacting a FL real estate attorney and ask him to prepare an agreement with the novation language I provided.

@DCBeyondLuxury

2 жыл бұрын

@@ClintCoons Will do. Thank you!

Good stuff Clint. Couldn't the wholesaler just put the novation clause in the assignment contract?

@ClintCoons

Жыл бұрын

It would be in the PSA not the assignment becasue you want a release from the seller.

This is great. But one question how do you collect my assignment fee if there’s going to be a new contract with the same terms how do I get paid the difference. Thanks.

@ClintCoons

Жыл бұрын

Up front or at closing.

@merrickloveland4076

Жыл бұрын

Easiest way would be to file a memorandum of agreement on that first contact. Then you're paid to release your agreement on the hud.

@kathymitchell3157

Жыл бұрын

Thank you guys. Real talk. Very professional. Thanks again.

Great. Where is the language clause to ad to agreement?

@ClintCoons

Жыл бұрын

In the notes for the video.

For assignments, what about this? "Buyer may assign this Contract with full release of liability without further approval of Seller."

@ClintCoons

5 ай бұрын

I gave you some language in the notes. Here is a link: kzread.info?event=video_description&redir_token=QUFFLUhqbVVJRUdHRzcxNUpQYUw4SGc1dUJZRTlYdTlJZ3xBQ3Jtc0tsY0I4emNwUlVrUklWSnp4ekZPc2xNeVREU2lvb0ctTzI1cHpnaUkyWHBMNmtnbVMwcXZtbmpLeUdJQzAxVkI1NDdJX1BobEhtRVNtWWFUSE1mT2ZNSTZUR0VWVnZvSEtnRHlYZGs3Q2l3bDJHYzUxdw&q=https%3A%2F%2Fdrive.google.com%2Fdrive%2Ffolders%2F1T8SKjfjL78QCI52Zhbkp9qx_cTgL5lYG%3Fusp%3Dsharing&v=TxHZCgoPGqM

do you still get paid the same way? through close of escrow?

@ClintCoons

2 жыл бұрын

If you set it up that way

Will this work for retail buyers

@ClintCoons

Жыл бұрын

Sure but if you don't plan to wholesale the property why would you want to include the language?

But I’m also confused cause I watched pace’s video to it’s different terms then yours.

@ClintCoons

Жыл бұрын

How so?

Awesome

@ClintCoons

2 жыл бұрын

Thanks

What if there’s a Agent involved

@ClintCoons

Жыл бұрын

Probably make it more difficult to put this deal together if the agent is a buyers agent.

An *option to buy an option* is a personalty option contract that grants to the Optionee the right to buy the Optionor's realty option contract with the seller. At exercise, by countersigning (in the presence of the closing agent) the attached assignment agreement as the Assignee, the Assignee now owns the realty Option as the Optionee with the seller and can exercise that option to buy the property from the seller. In Illinois, the structure is a little different. Instead of an assignment agreement attached to the personalty option contract, the personalty option has an attached realty option signed & notarized ONLY by its Optionor (property owner). The personalty option is exercised (in the presence of the closing agent) by its then-current Optionee countersigning the realty option as the Optionee (property buyer). The realty option is now an executory contract with original signatories to that option, which may be exercised by countersigning its attached non-contingent Purchase and Sale Agreement to become executory status to complete the purchase. The personalty option is not covered by the Illinois statutes for real estate licensing for assigning realty options and realty purchase contracts. Therefore, no real estate license is needed to assign personalty contracts. The realty option and realty purchase contracts do not legally exist until they are fully signed and countersigned. I am not an attorney, so don't believe anything I just said; legal information is NOT legal advice. Always ask your attorney to review your documents for legal compliance and efficacy for your situation. Real Estate Option Contract Basics kzread.info/dash/bejne/opalp6iPnLGZhJc.html

Your awesome bye the way.

@ClintCoons

Жыл бұрын

Thanks

How does the original investor still get paid

@ClintCoons

10 ай бұрын

At closing or before

Do you have a Novation contract we can download?

@ClintCoons

Жыл бұрын

drive.google.com/drive/folders/1T8SKjfjL78QCI52Zhbkp9qx_cTgL5lYG?usp=sharing

👍🏿 Like the video n' tell your mates

@ClintCoons

2 жыл бұрын

Albert Brighton Thanks for watching.

This was so confusing

I’m 🎉😮😮😮😮😮j