Novations: the middle rung of the downsell ladder

Back into the highest seller net with the novation calculator, then pitch a listed sale with light make-ready when a house is dated but structurally sound.

• What a novation is (Desktop tool: novation-calculator, SKILL.md): not a flip and not a wholesale assignment. You enter a novation agreement with the seller, do light make-ready work, list the property
• When novation is the right tool:
• Cosmetically dated but structurally sound houses. If make-ready runs over roughly 8-10% of ARV or the property needs a true gut, novation is the wrong vehicle; point it at a flip or straight wholesale
• The two required inputs, produced upstream: ARV from the comping skill (6.1) and the make-ready cost from the rehab estimator's WHOLETAIL number (6.2). If either is missing, do not guess; run those sk
• The novation waterfall (Desktop tool: novation-calculator): Sale Price (ARV x (1 - haircut, default 0%)) minus selling costs (~8% all-in: 6% commission + ~2% closing/title/concessions, plus transfer t
• Hold time is built, not guessed: make-ready duration (light cosmetic typically 2-4 weeks) + market DOM from the comp report + ~30 days to close (Desktop tool: novation-calculator).
• Three fee models, one waterfall (Desktop tool: novation-calculator): spread-based (default, answers "what do I offer?"), flat fee (seller named a hard net; solve for the required list price), % of sal
• The sanity checks, non-negotiable (Desktop tool: novation-calculator):
• Payoff clearance: the seller net offer MUST exceed mortgage payoff plus liens, or the deal is dead; the single most common novation killer. Failures point to a price reset, subject-to, or short sale i
• Spread health: projected profit under ~6% of sale price is thin; an $8K net on a $300K sale rarely justifies the carry and execution risk.
• Novation fit: heavy make-ready relative to ARV means wrong vehicle.
• List-price realism (flat-fee model): the required list price must not exceed what the comps support.
• Deliverable: the in-context waterfall summary plus a 4-sheet Excel workbook (Summary, Offer Waterfall, Fee-Model Comparison, Assumptions and Sanity Checks) (Desktop tool: novation-calculator).
• Selling costs are real: ~8% plus transfer tax is often the biggest line after the seller's net; never quietly drop it (Desktop tool: novation-calculator).