Novations

Novation agreements in Chicago and Illinois

A novation lets a homeowner sell at closer to full market value without paying for repairs or prep upfront. An investor partner handles improvements and marketing, and the seller receives an agreed price at closing. I help sellers and investors understand whether a novation fits, and how it compares to a cash sale or a traditional listing.

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  • Daniel EllingtonLicensed Illinois Real Estate Broker
  • Infiniti PropertiesBrokerage since 1991, Homewood office
  • IL License #475211812Chicagoland and throughout Illinois

Who this is for

Homeowners

You want more than a cash offer, but can't afford repairs, cleanout, or carrying costs before selling.

Inherited and dated homes

Properties that need cosmetic work to reach full value, with owners who want minimal involvement.

Investors

Investors who want to add novations to their acquisition options, with a licensed broker to handle listing and compliance.

How it works

  1. Compare your options I show you your likely price as-is to a cash buyer, listed as-is, and after improvements.
  2. Agree on terms Seller and investor agree in writing on the seller's price, timeline, and who pays what.
  3. Improve and list The investor makes agreed improvements and the home is marketed on the MLS.
  4. Close A retail buyer purchases the home and the seller receives the agreed amount at closing.

What I do for you

  • Side-by-side net proceeds: cash sale vs. novation vs. traditional listing
  • MLS marketing with professional photos and Zillow Showcase
  • Review of timelines, improvement scope, and what happens if the home doesn't sell
  • Coordination with real estate attorneys on both sides
  • Clear disclosure of everyone's role and compensation

What sellers should know first

A novation usually takes longer than a cash sale, often a few months, and the final result depends on the improvements and the market. Make sure the agreement spells out the seller's minimum price, the timeline, who pays for repairs, and what happens if the home doesn't sell.

Have your own real estate attorney review any novation agreement before you sign. In Illinois, real estate licensees involved in a novation must clearly disclose their role and their interest in the deal.

Common questions

What is a novation agreement in real estate?

A novation agreement replaces a seller's original arrangement with a new one in which an investor partner gets the right to improve and sell the home. The seller agrees to a set price, the investor funds improvements and marketing, and the investor earns the difference between the sale price and the seller's price, minus costs.

Is a novation better than a cash offer?

It can be if your home would sell for significantly more after cosmetic updates and you can wait a few months. A cash offer is faster and more certain. I'll show you the numbers for both.

Who pays for repairs in a novation?

Typically the investor pays for agreed improvements upfront and is repaid from the sale. Confirm this in writing, along with what happens to those costs if the sale falls through.

How long does a novation take?

Often 60 to 120 days, depending on the scope of improvements and how quickly the home sells. Your agreement should include a deadline and your options if it isn't met.

Is a novation legal in Illinois?

Novations are a contract arrangement, and they can be structured legally, but details matter. Each party should have a real estate attorney, and any licensed agent involved must disclose their role and financial interest.

This page is general information, not legal, tax, or lending advice. Consult a real estate attorney, CPA, or lender about your situation.

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Want to compare a novation to a cash offer?

Call or text Daniel directly, or send a message. Most inquiries get a same-day response.

708-625-8788
Infiniti Properties, 2401 183rd St, Homewood, IL 60430
Brokerage 708-206-3000  |  IL License #475211812

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What Our Clients Say About Us

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Daniel Ellington: Chicago’s Best Real Estate Broker
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Adam Bevan
Adam Bevan
11 months ago

Dan was an excellent representative for us and I wouldn't hesitate to work with him again

Lorenzo Douglas
Lorenzo Douglas
8 months ago

Daniel has been amazing for me as an out of state investors. Very response, pretty decent comps. He's gone above and beyond for me.

Jared Rowntree
Jared Rowntree
7 months ago

Daniel was absolutely phenomenal during our house hunt and closing. Any time an issue came up, Daniel took it in stride and helped everybody involved to have a smooth process. He is wildly friendly and knowledgeable, and was invaluable to us as First Time Homebuyers; he kept us informed and up to date the second anything changed. I wouldn’t hesitate to hire Daniel again for my next house, and the next ones after that.

Michael Van Kley
Michael Van Kley
4 months ago

Daniel was great. I would use him again.

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