The proliferation of alternative ways to sell a home continues to expand across the country.
Knock’s Home Swap, a program for buying a new home while waiting to sell the previous one, has now launched in Denver. It is the fourth market in which Knock has started operating what it calls “a reimagining” of its home trade-in model, which partners with local agents to facilitate transactions.
The company’s goal is to have Home Swap operating in 11 markets by the end of 2020. Reached on the phone regarding his company’s expansion, Knock CEO Sean Black told Inman he is very optimistic his team will reach its expansion goals.
“It’s looking great, we’ll be announcing two more markets in two weeks, and then probably [announcing] in another two weeks,” Black said. “We’re excited.”
The business model, an alternative to traditional lenders, is designed to relieve the added pressure of having to sell in order to buy or missing out on an ideal home while a listing is on the market.
In summary, the seller pays for the new home while Knock pays for the previous home while it’s on the market.
Knock’s Home Swap platform includes a fully integrated mortgage at what the company says is a competitive rate, according to a July 18 Inman story.
The new loan is not contingent on the previous home’s sale, and thus it emulates a cash offer, which is becoming the de facto way to win a competitive home bid situation recently as inventory continues to dissipate.
Also, buyers are waiving more than sales contingencies. Inspections are also being eschewed for a better chance to get an offer accepted.
Local agents can train and certify to work on a Home Swap.
“For the first couple of years, we were doing it all internally, from soup to nuts, making money as a brokerage,” Black said. “We got out of that business completely in order to partner [with agents], now as a fully licensed lender, we make money as any mortgage company would on a primary mortgage.”
Partnering with a Knock agent allows sellers to enter the program and become eligible for home financing. It also removes the hassles of having to muddle through home improvements and market preparation efforts.
However, when that time does come, Home Swap participants can apply for a $25,000 bridge loan to cover those costs before putting it on the market. Knock also has a list of locally appointed home repair specialists and specialized vendors.
Black said there’s no added fees or interest charged on the bridge loan. “Bridge loans are really expensive [for customers], it doesn’t make sense for us to try to make money on it.”
Knock will also offer to buy their clients’ old house should it not sell within 6 months. The press release states that 90 percent of its listings sell within 90 days. The company charges a 1.25% fee on the purchase price of the new house.
As of press time, agents at RE/MAX Professionals, Berkshire Hathaway HomeServices Innovative Real Estate and West + Main Homes are Knock certified.
There are currently 5,000 certified agents in Atlanta, Dallas-Fort Worth and Phoenix.
The company was founded in 2015.
Have a technology product you would like to discuss? Email Craig Rowe
Craig C. Rowe started in commercial real estate at the dawn of the dot-com boom, helping an array of commercial real estate companies fortify their online presence and analyze internal software decisions. He now helps agents with technology decisions and marketing through reviewing software and tech for Inman.