Novations Explained: Close More Deals Without Lowballing

What's up everybody? What if I told you there was a way to do more deals, make more money, and stand out in a crowded market without lowballing sellers or competing with a ton of other investors? I know it sounds crazy, right? But what if I told you that this strategy not only helps you to win more business but also builds the trust you have with sellers and it makes them want to do business with you? Today I'm going to show you exactly how to do it. All right, I'm going to teach you how to use novations to maximize the number of deals you close, and I'm going to walk you through the paperwork step by step And I'm even going to show you how to list the properties on the MLS like a pro. And by the way, this isn't just theory. I'm going to actually show you a real-life deal that we're working on with one of our students where we turned a frustrated seller into someone that was happy and willing to work with us and how you can do the same thing. So if you're tired of missing out on deals because sellers won't accept your low offers, or if you're just looking for a better way to stand out in a competitive market, this video is for you. Okay? So let's dive right in. But before I get into the nitty-gritty, Let me tell you about the deal we're working on right now. It's a perfect example of the, how the painless flipping strategy works and why it's so powerful. One of our students had a lead come in and he needed help negotiating with the seller. So we work with our people in our apprenticeship program to help them negotiate their deals. Cause a lot of the time they don't know how to navigate situations like this where seller wants more money and they don't know what to do, even though it seems like it might work. The seller had a rental property. He wanted to sell it as is. He wasn't motivated enough to accept low cash offer. And he'd already turned down another investor's offer of $280,000. He was actually pretty frustrated with that low offer and he didn't know what to do next. So instead of us pushing him a low offer, we asked questions. We explored his options and explained how our process works. We told him that the average cash buyer is probably going to be more around the $270,000 to $280,000 range that he was getting. But we do have relationships with a couple cash buyers that are usually able to pay a little bit more. And for us, in order to see if we can pay a little bit more and get him his desired goal of $310,000, we just have to put this under contract and either flip it with one of our partners or wholesale it to him. So we told him about the process that we run, and he was okay with that. We've got it under contract, and after our team and cash buyers walked through the property, the best offer we got was $270K. All right, so he had an offer at $280K. So we said to him, hey, you should go back to the original investor and ask for non-refundable earnest money to test their seriousness. Turns out they weren't that serious. That's when we took him to the next step of the painless flipping process. We explained that with a novation, we could list his property in the MLS, get him more money, get him what he wanted, and handle the entire process for him, making it stress-free. He trusted us because we had already been transparent every step of the way, and now we're closing the deal as an Ovation. This is what makes the difference and what makes us different. It's not about lowballing sellers or hoping to get lucky by just making a bunch of offers and just hoping someone accepts it. It's about finding the best solution for them while creating opportunities for yourself. Now I'm going to show you exactly how to do this. I'll walk you through the paperwork, how to list it on the MLS, I'm even going to show you a conversation I had with a real estate agent that wanted to list this novation. So let's dive right in.

So right now I'm going to show you exactly the paperwork that you need to fill out in order to do a novation. And, um, I'm also going to add exactly what you need to do after you get the paperwork signed and how you are able to get the novation on the MLS. Okay. So let's start out with the paperwork. If you guys can see this, this is my contract that I give out to people. This is the one that I've used and actually have a video that goes over really in-depth beginner's guide to filling out real estate purchase contract. It goes over how to fill out this contract. So we're not gonna be going over how exactly to fill out the real estate purchase contract 'cause you can watch a video on it. But basically you get the seller to sign this agreement to agree on the specific price that they're going to get after you do the novation. This is the money that they're going to get after the sale of their property, okay? So obviously when you do a novation and you list it on the MLS, you're gonna have to list it for more 'Cause after fees and commissions and everything, this is what they'll get, and you have your fee in there as well. And the thing that I put at the end of my contract is what you need to be able to do the novation. It's the authorization to sign listing documents and offer, okay? So other people, sometimes they call it an attorney in fact, or essentially it's a power of attorney, right? You're able to sign the listing documents for in behalf of the seller, okay? When it comes down to paperwork, this is what you need. A real estate purchase contract, have them sign it. And here is the paperwork that you need to sign in order to do a novation to list this property on their behalf, okay? If you want this paperwork, you can get it. I have this for you in my Facebook group. It's free, just check it out there. Now, after you get this signed, you're probably wondering now, okay, so I have I have the real estate purchase contract signed and I have the authorization to sign listing documents signed. What do I do now? There's two options that you have, okay? You can go and take this paperwork and you can go to brokerlist.com, and for $99 you can list the property on the MLS without your license, and they give you 6 photos, blah blah blah. At $149, 25 photos in 6 months. At $188, you get 25 photos. For me, this house that we're doing an ovation on it. It needs a lot of work, so we're not going to put a ton of photos on there. If people— we're just going to list it at a good price, and if people want to see the house, they can go see it. It's pretty simple. How do you work with this? It's pretty simple as well. You just go here to Six Pics, um, that's what we're going to be doing, and we're going to go to PayPal. So done. So the next thing that happens is they email you and they say, okay, we need this, the contract signed, we need the attorney-in-fact, we need this information from you so we can get this live. And then you have to fill out bunch of information. Now I'm not going to go in and do this exact process for you right now, but I can show you what their email looks like. So here you go, you get an email, and as I was saying, you need an attorney-in-fact. So once that you've looked into broker lists and filled out all the information and got the email, you can do that. And what broker lists is, is you just take the calls yourself. They forward them to your cell phone, then you can talk to them, right? Talk to anybody that wants to buy the house. The other option is if you don't want to deal with brokerless, for $99 or $150 or $188, you can hire a real estate agent and they can list it for you, and you can pay them a commission and negotiate something. So one of the buyers that came and saw the house that wanted to make an offer on it um, he offered obviously lower than what the seller was willing to accept because we weren't able to, um, make a deal happen. And I let him know that. And so he reaches out— he reached out to me and he said, hey, were you able to renegotiate this deal? If you can't get it down, I can list it for you, so, and give you a referral deal. So he offered that. So I had a phone call with him to see what he would charge to list the property, what his commission like for listing it would cost. And I have this call recorded as well, so you can listen to how I navigated that call. So it really just comes down to, do you want to have an agent do it all for you so you don't have to take calls and do the paperwork on brokerlist.com that takes maybe like 30 minutes? Are you willing to pay someone like $6,000? That would be the commission on this deal as, as you're going to see in this video, uh, of the recording of our call, be about $6,000. Or do you do it yourself and take the calls and do it for $100? I would do it yourself. Um, just align yourself and connect yourself with an investor-friendly title company in the market that you're doing the deal, and they'll be able to help you out. And it's pretty simple, like you don't have to, uh, overthink it. Really what you're doing is you're just putting the property on MLS and, uh, taking calls and negotiating with, uh, buyers, whether it's with an agent that represents the buyer or some cash buyer that calls. It doesn't really matter.

See, the thing is, is that house is only worth $420,000 to $425,000.

Right, right.

There's a flip that just closed on Friday that's a $430,000 comp.

Gotcha.

I don't think that it wouldn't qualify for FHA loan. It's got some mold in the bathroom that could probably be taken care of, just odds and ends kind of things. But And there's no major things that would prevent it from getting a loan.

I'm just trying to like, for me, I just have to weigh out like where it makes sense. So like 2%, if we list it with you, what would that be like $6,000 or something like that to have it be listed? And then, you know, brokerlist.com is easy, right?

It's just like—

$200.

Yeah, $200.

I use them. Yeah, yeah, exactly. So it's just for me, it's like, you know, is there going to be enough spread? Does it make sense? To be honest, man, like 2% to, uh, to do it— not, not saying you're not valuable, but it probably just doesn't make sense at that for me just because it's like $200, $100 for me to do it, you know?

Okay, well, if you change your mind, let me know.

Yeah, yeah, for sure. Um, I appreciate you reaching out. I know, you know, Those are, those are the options, right? It's like I do it myself or you help me out. I guess what, what would be the benefit? Uh, what else could you help me out with like that, uh, that would be worth it so I wouldn't have to do it?

Well, I mean, I manage everything. I manage all the communication. I, you know, summarize everything. I bring it to you and you make a decision quickly and not having to deal with all the stuff that you have to deal with. I mean, you know what I'm talking about. Yeah, well, there's value, but it's just, you know, if you're familiar with broker lists and you're capable of doing all the work.

All right, well, pencils out that if we sold to $350,000 and had these costs that I just put out, we'd make around $15,000 on this novation, and that's with your commission. So let me get back to it because I have a partner on this, so I'll just kind of mull it over and see. But dude, I really appreciate you reaching out, you know, and, and chatting with me about it.

Yep, have a great day.

Pretty simple, huh? You just need to decide whether you think it's worth it or not to work with an agent or to list it yourself. So let's recap. You'll need an attorney-in-fact, the document that you saw in the video I showed where I was sharing you guys my screen on what documents you need, a real estate contract, and you just need to list it on the MLS yourself or work with an agent. As I've been saying, this is the painless flipping strategy. It's a transparent seller-focused approach that creates opportunities for everyone involved. If you're ready to start making money in real estate the right way, hit the like button, subscribe, and let me know if you have any questions or comments, or if you've even tried innovation. Let me know. For more tips and resources, check out the links in the description. Thanks for watching, and we'll see you on the next video. Until next time, happy flipping.