Novations are Brokering Without a License. Change My Mind.

[Scott Johnson]

Let me be more specific. I didn't have enough space in the Title:

Novations where the investor uses a Limited Listing that puts them as the primary contact for scheduling showings, receiving/accepting offers and negotiating are brokering without a license.

Novations where the investor actually hires a real estate broker to handle the aforementioned for the seller are not included. As far as I'm concerned, they're a great way to wholesale in states where they've outlawed wholesaling. 

And yes, I'm a broker. I've got something to gain. I'm Novation Listing Friendly. Deal with it.

Correct me where I'm wrong but Novations can be executed by either a Power of Attorney being given to the investor or by an investor just doing the paperwork, both being done after they secure their interest with an option contract (unless there's some other creative thing I haven't heard about yet). With the Power of Attorney, there may not be an issue. 

All I can say is that when an investor is the person who's doing the job that a real estate broker is commissioned to do, per state law, that's brokering without a license, which is no bueno and shouldn't be allowed. 

If novations are done using a broker, it's straight up CYA. Work their commission into your numbers, especially if they understand novations.