Local Home Buyers USA
Raising the Bar: Local Home Buyers USA Publishes the Novation Transparency Standard
Dateline: September 30, 2025 — United States (Nationwide)
We’re formalizing how we explain and execute novations: transparent math, plain‑language disclosures, and side‑by‑side comparisons to cash and listing. Sellers deserve to see how the numbers work—before they decide.
TL;DR for Editors
- Standard: Our public, documented process for explaining novations in plain English.
- Proof: An anonymized deal model (before/after net sheet), disclosure table, and a 3‑way comparison.
- Promise: No pressure. If a different path beats us, we’ll say so.
Plain English
What Is a Novation (and Why Would a Seller Choose It)?
A novation updates an agreement so we can make improvements and market your property at retail, then settle proceeds transparently per the contract. You keep ownership during the work and sale; we manage the process and the costs according to the agreement. When the property sells, funds are distributed: first to pay off the original obligations and documented costs, then to split the remaining net as agreed. The goal is simple: if the retail route can reasonably increase your net more than a straight cash sale—and you have the time and appetite for it—novation may be the best fit.
Why now
Speed vs. Net: Pick the Right Trade‑Off
Cash offers win on certainty and speed; listings can win on price but introduce time and financing risk. Novation aims to sit in the middle: we manage improvements and positioning to lift value and compress time, while keeping you informed with written math at each step. If a cash offer beats the realistic novation net (after costs, time, and risk), we’ll recommend cash. If listing beats novation on your timeline and goals, we’ll tell you that, too.
Media
Watch: 60‑Second Commercial
Media
Watch: Seller Testimonial (Short)
The Standard
Novation Transparency Standard: Our 8 Commitments
- Plain‑Language Docs: Contracts and summaries written for humans, not loopholes.
- Upfront Math: ARV comps with dates/distances; repair scope with ranges; holding/closing assumptions listed.
- Disclosure Table: Every fee, who pays it, when it’s due, and whether it’s capped or variable.
- Change Logs: Written explanations if numbers move (title findings, scope shifts, market comps).
- Weekly Touchpoints: Timeline, work status, showings, buyer feedback—no black boxes.
- Multiple Exit Plans: Pre‑agreed pivots if milestones slip (price, refresh, cash fallback, listing handoff).
- No‑Pressure Decisions: We invite you to compare all paths—including ones we don’t profit from.
- Independent Review: We encourage you to consult counsel; we’re happy to explain terms side‑by‑side.
Proof: anonymized model
Before/After Net Sheet (Illustrative)
| Line Item | Cash Sale | Novation (Retail) |
|---|---|---|
| As‑Is Value (current condition) | $210,000 | — |
| Projected ARV (after updates) | — | $275,000 |
| Estimated Repairs / Updates | $0 (sold as‑is) | $22,000 (managed by LHBU) |
| Holding / Utilities (estimated) | $0 | $2,400 |
| Title / Closing Costs | $2,000 | $3,500 |
| Time to Close / Sell | 7–14 days after clear title | 30–60 days (work + market) |
| Gross Proceeds | $210,000 | $275,000 |
| Total Costs (see disclosure) | − $2,000 | − $27,900 |
| Estimated Net (before mortgages) | $208,000 | $247,100 |
| Seller–Buyer Split (novation) | — | Example: 80% Seller / 20% LHBU on uplift |
| Seller Net (illustrative) | $208,000 | $239,680 |
Full disclosure
Sample Disclosure Table
| Item | Payer | Type | Amount / Basis | When Assessed |
|---|---|---|---|---|
| Repairs/Updates | LHBU (fronts cost) | Variable (capped) | Up to $22,000 (scope attached) | As work is completed |
| Holding/Utilities | LHBU | Variable | Est. $2,400 | Monthly during project |
| Listing/Marketing | LHBU | Fixed | $0 (included) | At listing |
| Title/Closing | Seller | Variable | $3,500 (est.) | At closing |
| Uplift Share | Seller + LHBU | Split | 80% / 20% of net uplift | At closing |
Your options
Cash vs. Novation vs. Listing (High‑Level)
| Factor | Cash (As‑Is) | Novation | Listing (Agent) |
|---|---|---|---|
| Speed & Certainty | Fastest, highest certainty | Moderate speed, good certainty | Slow–moderate, buyer financing risk |
| Potential Net | Lower | Medium–High (after costs) | High (after fees/repairs/time) |
| Repairs Needed | None (we buy as‑is) | Managed by LHBU | Often required for retail |
| Your Involvement | Minimal | Light touch; weekly updates | Showings, negotiations, contingencies |
| Best For | Urgent timelines, heavy issues | Balanced goal: higher net w/ help | Max net when time & condition allow |
Sensitivity
What‑If Scenarios (Sensitivity)
- Repairs run 10% over: We apply the cap/trigger in the disclosure; we discuss options before proceeding.
- Market softens mid‑project: We can adjust pricing/positioning, refresh marketing, or pivot to the cash fallback.
- Buyer financing falls through: We pre‑qualify, line up backups, and keep you posted; timeline buffers are built in.
Process
Step‑by‑Step (No Surprises)
- Discovery: Goals, timeline, property facts.
- Transparent Underwriting: ARV comps + scope ranges.
- Agreement & Disclosures: Plain‑language contract + caps.
- Improve & Position: Work done; weekly updates.
- Market & Negotiate: Retail exposure, buyer diligence.
- Close & Settle: Net sheet finalized; proceeds split per agreement.
FAQs
Common Questions
Sometimes. If the uplift after costs, time, and risk is meaningful, yes. If not, we recommend cash.
No—under our standard, we manage and front costs within agreed caps; details are disclosed.
Often 30–60 days, but timelines depend on scope and local demand. We provide buffers and weekly updates.
We define fair exit conditions in writing so you’re never trapped by surprises.
Our stance
No‑Pressure, Evidence‑First
We earn trust before business. If the math says listing or another buyer serves you better, we’ll help you get there—because reputation compounds.
See the Math On Your Property (60 Seconds)
Answer a few questions and we’ll share a transparent, compare‑ready view for cash, novation, and listing—so you can decide with confidence.
Press & Seller Inquiries
Request Your Transparent Novation/Cash Comparison
Research & Sources
Authoritative Resources We Encourage Sellers to Read
We want homeowners to check our work. Below are **neutral, university‑backed** and **primary legal** resources that help define terms and set expectations. We’ve included plain‑English descriptions so you can decide which links to open first.
- Cornell Law School — Legal Information Institute (LII): Novation — a concise legal overview of how novation replaces an original obligation with a new one and why consent of the parties matters.
- Cornell LII: Closing (Real Estate) — explains what “closing” entails, who’s involved, and why document volume is high.
- Cornell LII: Title Insurance — background on title searches and lender requirements; useful context for both cash and retail paths.
- Cornell SC Johnson — Center for Real Estate & Finance (CREF) — a hub for real‑estate research, roundtables, and practitioner‑focused publications.
- Cornell Real Estate Review — long‑running academic‑industry journal with articles across finance, development, law, and operations.
We reference outside sources to help you make sense of the process. Nothing here is legal advice; always consult a qualified attorney in your state.
Deep guide
From “What Is a Novation?” to “Is It Right for Me?” — A Long‑Form Seller’s Guide
Start with goals, not mechanisms. Tools like cash purchases, novations, and listings are means to an end. The end is your definition of success: a clean exit on a deadline; the highest plausible net within a reasonable timeline; or the least mental load. We begin by translating your goals into constraints (date, certainty, scope tolerance) and then map paths that can satisfy them. This guide offers a deep explainer so you can evaluate our recommendation like a pro.
How Novation Fits Within the Landscape
Think of selling options along a spectrum of certainty and potential net. A cash sale concentrates certainty; a retail listing concentrates potential net; novation is a structured middle ground where we do the heavy lifting to compress time and increase marketability while documenting the math in writing. If your property is financeable today and time is flexible, a listing may win. If your property has significant defects or timelines are acute, cash often wins. If you have some time and the property will benefit from targeted improvements, novation may produce a better net without you managing a rehab.
Transparency, in Practice
Our Novation Transparency Standard formalizes disclosures: comparable sales with dates/distances/conditions; a written scope with caps and change‑log triggers; holding and closing assumptions; and a simple net sheet. When a number changes, we don’t hand‑wave—we certify the change in writing and show its effect on your projected net. That’s why our illustrative tables are built to be compared side‑by‑side with any offer you receive elsewhere.
Title, Closing, and the “Paperwork Problem”
Many sellers are surprised by how much paper is involved at closing. That’s normal. For neutral context, see Cornell’s LII overview of real‑estate closings and title insurance. We coordinate closely with licensed title companies and follow their wire‑verification procedures. If you have questions about a document, we’ll explain it in plain language and point you to the clause that matters.
Comparing Apples to Apples
When you receive multiple offers, set up a simple matrix. Use our net sheet and disclosure table as a template and request the same from others: the ARV comps and dates; the scope and caps; the holding/closing costs; the expected timeline; and exit options. If a buyer refuses to provide written assumptions, treat the offer as an estimate rather than a commitment.
Risk: Who Holds It, Who Prices It
Every path prices risk differently. Cash buyers price risk into the offer and deliver immediate certainty. Listing pushes risk onto time and buyer financing. Novation shares risk via agreed caps and change‑log triggers, while creating upside by improving the product and positioning. The right choice depends on your appetite for variance and your priority between certainty and net.
Ethics & Guardrails
Our no‑pressure rule isn’t a slogan. We will help you pursue a path that isn’t ours when it’s the right one. We publish standards publicly so you can hold us accountable. And we invite you to validate our definitions with neutral sources like Cornell LII’s novation entry and read practitioner research from the Cornell Center for Real Estate & Finance and the Cornell Real Estate Review.
Internal Resources (Next Steps)
- Read FAQs and use the table comparisons to evaluate any offer you get.
- Get your cash offer — we also show side‑by‑side novation/listing math on request.
- Privacy policy — how we handle your data when you submit the form.
Editorial rigor
How We Keep This Page Accurate Over Time
Markets move. Laws evolve. To keep this page trustworthy, we maintain a refresh schedule and log changes publicly: what changed, why, and when. We monitor public resources like Cornell’s Center for Real Estate & Finance updates and the Cornell Real Estate Review to inform context sections, and we periodically link to neutral explainers from the Cornell LII for definitions. We also solicit reader feedback—if something is unclear, tell us, and we’ll improve the wording.
We avoid superlatives, disclose assumptions, and resist estimate games. If a timeline or cost is a range, we label it as such. If something is only true in certain states or with particular loan types, we flag it. That’s how we earn trust before business.
Real-World Seller Insights
Fresh how-tos and market tips from Local Home Buyers USA.
