Purchase Agreement vs. Novation Agreement: What's the Difference in Florida?
2 min read · Last updated 2026-08-03 · Reviewed by Camilo Palacio, Licensed Florida Real Estate Professional (License #3280644, REALTOR®)
A purchase agreement is the contract that sets a home's sale terms. A novation is different: it substitutes a new party into an existing agreement and fully releases the old party, once everyone signs off in writing. Cash Flow Deals is one option that uses both. A purchase-style agreement locks your net price first, then a novation puts the real homebuyer in your seat, so title transfers once, straight from you to them.
| Factor | Traditional Listing | Cash Flow Deals |
|---|---|---|
| Timeline | One contract, one set of terms, fixed once signed; substituting a new buyer usually means canceling and starting over with a new contract. | One purchase-style agreement locks the net number at signing. A novation later substitutes in the real buyer without reopening price talks. |
| Repairs | Seller pays for prep and any repairs flagged during the buyer's inspection or lender-required appraisal. | Net price locked before repairs get scoped. Cash Flow Deals re-costs only for real structural surprises, and the seller decides. |
| Fees / Costs | Commission is negotiable since the 2024 NAR Sitzer/Burnett settlement, paid to the listing agent out of sale proceeds. | Paid as one line item on the closing statement through Cash Flow Deals' licensed FL brokerage partner, not a markup on price. |
What a Purchase Agreement Actually Is
A purchase agreement is the contract that sets the terms of a home sale: price, closing date, contingencies, and who pays what. In Florida, the most common version is the FAR/BAR AS IS Residential Contract for Sale and Purchase. It binds two specific parties, a buyer and a seller, to those exact terms. If either party wants to swap in someone new, a purchase agreement by itself does not do that. It can be amended, it can include contingencies that let a party exit under defined conditions, but the two named parties stay the two named parties unless something else changes that.
What a Novation Agreement Does That a Purchase Agreement Doesn't
A novation is a separate legal mechanism. Cornell Law School's Legal Information Institute defines it as an agreement between contracting parties to substitute a new party for an existing one. The key feature is what happens to the original party: their obligations are fully discharged, and the new party takes over completely, with the original contract effectively replaced. That only works with everyone's written consent, buyer, seller, and the incoming party all have to agree. A purchase agreement sets what gets sold and for how much. A novation changes who is actually on the hook to deliver that deal.
Cash Flow Deals' Process: How the Two Agreements Work Together
1. Request your net-price walkthrough with Cash Flow Deals. 2. Sign a purchase-style agreement that locks that net number in writing. 3. Cash Flow Deals arranges a real FHA or conventional homebuyer whose own lender funds the purchase. 4. A novation substitutes that buyer into the deal, so title transfers once, directly from seller to buyer, with Cash Flow Deals never taking title itself.
Why the Substitution Matters to a Seller
Cash Flow Deals is a Florida real estate investor that locks in a net price for a seller's house before repairs are scoped, using a novation-based, flat-fee process arranged through its licensed FL brokerage partner, Silver Door Realty — not a traditional listing, and not a brokerage itself. Because the substitution happens through a novation rather than a second sale, the seller signs once, the title moves once, and the closing table has the seller and the real homebuyer on it, not a chain of intermediate owners.
The One Exception: When the Locked Number Can Still Change
None of this removes the seller's protection if something real turns up in the house itself. The one exception: if something structural surfaces that was not visible or disclosed before we signed — foundation issues, hidden moisture, old wiring, cast-iron drain failure — we re-cost it and bring the number back to you. You decide. You can walk away. We disclose what we know at offer time so this almost never happens.
Common questions
What happens to my original purchase agreement after the novation?
It gets replaced. Once the novation is signed by every party, the original agreement's obligations move to the new party and the prior arrangement is discharged, so the seller is dealing with one clean, current agreement, not two overlapping ones.
Does a novation cost the seller anything extra?
No. Cash Flow Deals is paid as one line item on the closing statement through its licensed FL brokerage partner, not as an add-on fee for the novation step itself.
Why does it matter whose lender funds the purchase?
Because the buyer who ends up on title is a real FHA or conventional homebuyer using their own lender's money, not a resale to another investor. That is what lets title move once, directly from seller to that buyer.
Can a purchase agreement include a novation clause from the start?
Yes, the two can be structured together in one process. That is how Cash Flow Deals sets it up: the purchase-style agreement locks the seller's number up front, and the novation step substitutes in the real buyer later without touching that locked number.