- Knock is a lender that can approve homeowners for a new mortgage before you sell your old home
- Knock also offers an interest-free Home Swap loan that can be used for a down payment, repairs, and overlapping mortgage payments
- Top benefits include greater flexibility in when you move and the ability to make a non-contingent offer on a new home
If you’re a homeowner planning to relocate, you have two choices. You could sell your old home first, then hope to quickly buy and move into a new home. Or you could buy a new home first — if you can afford to without selling your old home.
For many homeowners, both options are inconvenient and complicated.
Knock is a lender that aims to solve this problem with its signature service: a home trade-in service called Knock Swap.
This innovative program offers two types of financing options:
- Approval for a new home loan before your old one sells
- An interest-free bridge loan that covers tricky costs, such as a down payment and overlapping mortgage costs
Knock Swap gives customers the flexibility to move into their new home and then try to sell their existing homes.
Best of all, you’ll still work with a traditional real estate agent who can help you negotiate for the best deal on the open market.
Knock offers a free, online training session that helps agents become “Knock certified,” or fluent in the company’s offerings. In practice, Knock allows customers to work with the agent of their choosing and the certification is not a requirement.
If you need to find an agent, our friends at Clever Real Estate can help you connect with top-performing agents in your area, who work for pre-negotiated, affordable rates.
Pros of using Knock
You’ll be able to make a competitive, non-contingent offer on a new home, upping the chances that you’ll snag your first choice. You can get financial help with overlapping costs, without having to pay any interest. Inconvenient aspects of home sales — including repairs and showings — will happen when your old home is vacant.
Cons of using Knock
You’ll still be responsible for double mortgage payments — you’re just deferring some of them.You’ll have to pay Knock’s 1.25% convenience fee (based on the purchase price of your new home).You won’t have the chance to shop around for the best rates on your home loan.
What is Knock Real Estate?
Knock offers a unique service to homeowners who are buying their next home. Its Home Swap program allows you to get approved for a mortgage before your old home sells — which most lenders won’t do, due to limits on borrowers’ debt-to-income ratios.
Knock can do this because it offers homeowners a backup offer. If your home doesn’t sell on the open market, there’s still a guarantee that you can sell it directly to Knock.
This certainty allows buyers to make a competitive, non-contingent offer on a new home. In other words, your offer is much more likely to get accepted!
Knock also offers financial assistance to help homeowners cover the many costs of moving. If approved, you can receive an interest-free bridge loan that can cover:
- The down payment on a new home
- Mortgage payments on your old home until it sells
- Up to $25,000 toward repairs on your old home
Once you move into your new home, Knock can handle any repairs and pay the mortgage on your old property until it sells.
At the end of the process, Knock will deduct its fees — including the balance of your bridge loan — from the proceeds of your home sale.
What is a non-contingent offer?
In a typical home sale, buyers who already own a home often make a contingent offer on a new one. This is exactly what it sounds like — you agree to purchase a new property only if your old home sells first.
There’s just one problem: a lot of pieces have to fall perfectly into place. The seller of the property you’re interested in will have to take their home off the market (listing it as “pending” instead of “for sale”) and hope your home sells on the right timeline.
If sellers can avoid contingent offers, they typically will — especially in a seller’s market where homes sell quickly. Your old home becomes an obstacle that makes it more challenging to compete with other buyers.
Where is Knock available?
Knock isn’t available everywhere — so far, you can only use Knock in 15 cities across six U.S. states.
- AZ: Phoenix
- CO: Denver
- FL: Fort Lauderdale, Jacksonville, Miami, Orlando, Tampa, West Palm Beach
- GA: Atlanta
- NC: Charlotte, Raleigh-Durham
- TX: Austin, Dallas-Fort Worth, Houston, San Antonio
Not eligible for Knock?
If you live outside of Knock’s current service areas, you can still connect with top-rated listing agents in your community.
Our friends at Clever Real Estate have built a nationwide network of local listing agents. Get in touch for a no-strings-attached consultation with one of Clever’s Licensed Concierges.
How Knock Works
- Apply online. Knock will evaluate your financial situation in a two-step process that usually takes around 4 days. If you’re eligible, you’ll be pre-approved for a home loan to cover the cost of the new property you want to buy.
- Buy a new home. With Knock’s pre-approval, you can make a competitive non-contingent offer on a new home. Once your offer is accepted, you can close on your new home whenever you and the seller agree. After you’ve moved in, Knock will pay the mortgage on your old home for up to six months.
- Prepare your old home for listing. Once you’ve vacated your old home, you’ll work with Knock to make any necessary repairs. You can do the work yourself, or allow Knock to take the lead through its network of contractors. Knock provides an interest-free loan of up to $25,000 for repairs, which must be completed within 45 days.
- List and sell your old home. You can list your home for sale after you’ve relocated, so it’s empty and available for showings any time.
- Pay Knock back. Once your home sells, you pay Knock back for the repairs and the mortgage payments they made. And you pay a 1.25% convenience fee to the company.
What if your home doesn’t sell on the open market?
Knock provides a backup offer — but only if your home doesn’t sell on the open market after six months.
This is actually good for home sellers. Selling on the open market means that you’ll have an opportunity to potentially earn more than your asking price. Plus, you’ll have the freedom to negotiate details such as closing costs or concessions.
By contrast, Knock’s backup offer is typically for 80-85% of fair market value. While this certainty provides some peace of mind, Knock wants to avoid purchasing customers’ homes when possible.
What Fees Does Knock Charge?
Knock charges a 1.25% convenience fee, plus a $1,450 administrative fee, for its Home Swap Service. You’ll also have to pay realtor commission and closing costs, just as you would with any other home purchase.
Though Knock frames its service fee as the equivalent of an origination fee you’d pay to obtain a mortgage, most lenders charge just 0.5% to 1% of the loan amount. It’s even possible to shop around and avoid origination fees entirely — but not with Knock.
If you accept a Home Swap bridge loan, it will place a lien against your property — so you must repay it in full when your old home sells.
Your total costs can vary considerably. But consider this example, which gives you an idea of the costs you might incur when purchasing a new home and selling your old one. For simplicity’s sake, we’ll assume your old home is worth $300,000 and your new home is worth $350,000.
|1.25% convenience fee, based on your new home||$4,375|
|Loan processing and underwriting||$1,450|
|2-5% closing costs on your new home||$7,000-$17,500|
|6% commission, based on your old home||$18,000|
|1-3% closing costs on your old home||$3,000-9,000|
|5 months of mortgage payments*||$5,220|
|Repayment of Knock's repair loan||Variable — up to $25,000|
|Total||$39,045 to $55,545, plus repair costs|
*Assuming a $240,000 loan at 3.25%
If these fees are too high, consider contacting our friends at Clever Real Estate to get matched with a full-service partner agent. Your agent can help you to sell your home quickly — especially in a competitive market — and will charge just $3,000 or a 1% commission fee to help you throughout your entire transaction.
Your Clever agent can also help you find a new home to purchase — and depending on your location, you may be entitled to Clever Cash Back which puts some money back in your pocket.
Who Should Use Knock?
Working with Knock may be a good option if:
- You’re hoping to move quickly, and you don’t want to wait to sell your current home.
- You’ve submitted several contingent offers and haven’t had any accepted.
- You have very particular needs for a new home and may not be able to find one quickly after your current home sells.
Depending on your circumstances, it may make sense to accept Knock’s downsides, such as higher fees and double mortgage payments.
|You’re in a competitive seller’s market, up against buyers who are making non-contingent offers||Approval for a new mortgage before your old home sells|
|You can’t afford a down payment until you sell your old house||An interest-free loan for up to 20% of the new home’s sale price|
|You don't have the money for repairs on your current home, limiting your potential sale price||An interest-free loan for up to $25,000 of repairs, plus a network of contractors who work for negotiated rates|
|You’re stressed about keeping your home pristine and dealing with showings that interrupt your daily life||The opportunity to move into a new home first, avoiding inconveniences|
|You can’t afford to pay two mortgages if your transaction timelines don’t line up||An interest-free loan that covers up to six months of mortgage payments*|
*Note: You’ll still pay two mortgages, but not at the same time
Knock Real Estate Reviews
What customers liked about Knock
Overall, sellers praised the convenience associated with having Knock handle repairs on their behalf.
In fact, the convenience was so valuable that some reviewers felt it entirely justified Knock’s slightly higher fees.
What customers didn’t like about Knock
Though most reviews are positive, some sellers had regrets about working with Knock.
For example, some reviewers express confusion about Knock’s business model while others are disappointed in the quality of Knock’s repairs.
Ultimately, your experience may depend on the Knock representatives, agents, and third-party vendors who work on your transaction.
In addition to Knock’s Home Swap, the company also offers a program called Knock Nest.
This program allows you to tap into your old home’s equity by selling it to Knock. You’ll receive a cash payment you can use to purchase a new home. You can then pay market rent to stay in your old throughout your home search.
If you change your mind about moving, you can buy back your home from Knock at a predetermined price.
Alternatives to Knock
Knock vs. Orchard
Knock isn’t the only company that offers a home trade-in service. Orchard’s Move First service is very similar to Knock’s Home Swap option.
However, Orchard’s program is slightly different:
- Get a free home assessment. Orchard will determine the amount you can borrow against your current property’s equity. You’ll get to keep these funds.
- Receive up to 90% of your home’s value. Orchard offers “instant equity” homeowners can use to purchase a new home.
- Orchard’s team prepares your home. Like Knock, Orchard offers the option of handing over repairs and preparations for listing.
- Sell your home. Once your house sells, you’ll receive any money from the sale above the equity amount you borrowed. Keep in mind that Orchard will also deduct the cost of any repairs.
If your home doesn’t sell within 120 days, Orchard will still allow you to keep the instant equity amount.
Orchard’s fees are also structured differently — and are harder to predict up front. You’ll pay:
- A 6% fee, based on the cost of your new home
- 1-3% closing costs on your old home, plus 2-5% closing costs on your new home
- Utilities, taxes, and mortgage payments on your new home
- Variable repair costs for your old home
By contrast, Knock’s fees are relatively straightforward and similar to a traditional real estate transaction.
Read More: Orchard Real Estate Review & FAQs
Knock vs. iBuyers
Knock is very different from an iBuyer. An iBuyer aims to simplify the selling process by buying your house for cash. If you accept the iBuyer’s offer, you can close on your home on your timeline (typically 7-60 days) and know up front exactly what your property will sell for.
With Knock, you get help buying a new house before selling but still must go through the traditional process of finding a buyer for your old home and closing on a new one.
Here are some of the key differences between the two models.
|Selling your old home||Sell on the open market, with a backup offer you can exercise after six months||Makes an instant cash offer to buy your home|
|Purchasing a new home||Approves you for a new mortgage before your old home sells||Typically won’t be involved with your new home purchase|
|Real estate agent||Work with a traditional real estate agent to buy a new home and sell your old one||Typically work without a real estate agent|
|Overlapping mortgage payments||Loans you the money to cover your mortgage payments until your old home sells, plus repairs and other costs||Avoid double mortgage payments by timing your cash sale around your new home purchase|
You’ve seen their signs on the side of the road, or nailed to telephone poles. But how much do you really know about “We Buy Ugly Houses”? This guide details everything you might want to know about how they operate, and why you should (or shouldn’t) use them.
You get what you pay for, as the saying goes. So what do you get for a discount agent? This guide tells you exactly what you can— and can’t— expect if you decide to use a discount real estate agent.
Empty houses are notoriously difficult to sell; the absence of furnishings makes even the warmest spaces feel cold and impersonal. But with a few adjustments, you can sell an empty house without taking a loss— read on for our step-by-step checklist.