Compare Orchard and Knock

Editor's Rating

Users' Rating

Editor's Rating

Users' Rating

For Sellers

Cash Offers
15%-20%
Home Equity
Perch does not provide real estate services to home sellers. Instead, the company buys homes directly, repairs and resells them to consumers or investment companies that rent them to tenants. Perch make an offer equal to 80%-85% of home value accounting for fees and any cost of the repairs and resale.

For Sellers

Listing Rate
3% - 6%
Commission
Minimum commissions and other terms may apply. Buyer's Agent Commission (2.5%-3%) is collected by Knock when it buys a home on client’s behalf. If the seller of a new home is self-represented, the total commission remains at 3%. Buyer's Agent Commission split is also offered to the buyer of the client’s old home. If the buyer of the client’s old home is self-represented Knock keep the entire 6% commission.

For Buyers

Not Applicable
0
No Rates
Perch does not provide real estate services to home buyers. Perch does resell some of the homes it buys on the open market, just like any other real estate investor aiming for the highest return on investment.

For Buyers

Not Applicable
0
No Rates
When/if Knock represents home buyers, it keeps the entire Buyer’s Agent Commission amount (2.5%-3%). A home buyer can always try to negotiate a refund amount with any real estate agent in 40 States where allowed, but this company does not advertise the buyer’s rebates openly.
You are now comparing two different service models: Orchard is a direct home cash buyer while Knock is a trade-in program for sellers
Compare Orchard and Knock for home buying and selling. HomeOpenly is an impartial and an open resource focused on trending real estate services, portals and start-ups.

First published: 17 February 2019
Last updated: 29 March 2020

Buying and Selling with Orchard

Orchard (formerly known as Perch) is a Texas-based VC-backed real estate investor that operates across highly specific locations. Where available, Orchard mainly focuses on homogeneous homes built before 1978 and where the valuation of the home is between $125,000 and $500,000. In determining the offer, Orchard discounts from the estimated retail value after home is fully renovated. Alternatively, Orchard sometimes acts as a real estate broker and represents consumers as Orchard Realty.

Orchard Pricing

Orchard makes money with a difference between buying and selling each home. This difference is a combination of fees and home value appreciation between what Orchard buys and seller each home for. Sellers can expect to receive 80%-85% of their home value from this type of sale after any fees, cost of the minor repairs, and resale. For Sell Only service, Orchard Realty charges a 6.9% listing fee.

Listing Services

  • This Service Does Not Represent Sellers

Buyer's Agent Services

  • This Service Does Not Represent Buyers

Orchard Editor's Review:

Orchard will buy a home at a price that is below market value due to necessary repairs, renovation, and other factors. After Orchard buys the home, it renovates and resells it for a profit to other buyers or companies that rent homes to qualified tenants.

Orchard claims that its fees are limited by 8.5% Orchard fee, but this fee does not mean that Orchard will offer consumers a fair offer. Orchard is not obligated to present consumers with a fair offer for their property because, unlike a real estate agent, it does not represent consumers when selling a home.

Additionally, similar to a traditional home sale process, the seller is responsible for covering their closing costs. This typically includes (but is not limited to) title insurance policy, attorney and escrow fees, and any HOA transfer fees. With higher fees comes a convenience of an all-cash closing when selling a home. Orchard claims to provide convenience, speed, and certainty of a fast sale.

Dubbed as an iBuyer, Orchard makes an offer on a house within days or hours, but this offer is highly conditional. Each offer Orchard makes is just an estimate, it is non-binding until the company makes a home inspection. At the inspection Orchard will often find reasons to lower its original offer when it finds items that need repair or if it has made a mistake in its original valuation.

When the company is unable to make an offer, it simply redirects consumers to a random real estate agent in exchange for an undisclosed referral fee. When using Orchard consumers agree that company and “any of its affiliates, agents, service providers or assignees may call you, leave you a voice, prerecorded, or artificial voice message, or send you a text, e-mail, or another electronic message for any purpose related to your home sale or purchase.”

Orchard offers fast home sales, but these are typically accompanied by higher fees. Orchard only makes offers to select homes in select regions.

The main disadvantage of using Orchard is high losses in homeowners' equity. Orchard is a "heavy" model, backed by a large amount of VC capital ready to buy homes in all-cash transactions. As any real estate investor, Orchard is susceptible to losing money in any given transaction.

This model is susceptible to a number of risk factors, high operational costs and a continued need for higher-than-average Return on Investment (ROI) with each flip. Orchard is not legally bound to represent consumers, its main legal obligation is to its shareholders.

Orchard's fast transaction and easy move-out experience typically come at an extremely high price because this model incurs "double" transaction costs during the purchase, holding period, rehab work and final sale that includes real estate agent fees.

Orchard pays real estate agent commissions like any other buyer and seller of real estate, so these costs must be accounted for in the company's fee structure. The facts continue to point against Orchard's claims that it offers fair value for the houses it buys.

Moreover, because most homes in the United States are financed, homeowners own only partial net equity in their home. Banks receive the same amount of the remaining mortgage sum regardless of how any given home is sold, whereas only homeowners’ net equity is lost in transaction fees paid to Orchard.

Typically Orchard uses the following factors when determining the offer: existing condition of the home including repairs needed, time it will take to finish needed repairs, value of a home compared to other comparable homes in the area, real estate commission required to resell, costs associated with maintaining a home during repairs, including taxes, payments, insurance, utilities and homeowner dues.

Today, there are a number of highly qualified real estate agents who offer competitive listing rates and flat fee listings across the United States. Unless a situation absolutely requires a quick sale, HomeOpenly recommends that consumers first consider using a licensed real estate agent working on competitive terms to properly list their homes on the open market before turning to Orchard option.

Some real estate agents are now offering Concierge services that include painting, landscaping, and other services that help consumers place their home on the open market without upfront costs and high loss to home equity.

Orchard Service Areas:

San Antonio, Dallas-Fort Worth, and Austin

Buying and Selling with Knock

Knock, a multi-state real estate agent offers a home trade-in program to sellers on limited terms in Atlanta, Charlotte, Raleigh, Durham, Dallas, and Fort Worth.

Knock Pricing

Knock receives 6% commission to sell a client's old house, half of which goes to the agent representing the buyer of the client's prior home.

Further, it accounts for all added costs it incurred throughout the process and bills these to the client separately.

Knock also most likely receives 2.5%-3% Buyers Agent Commission when it buys a home on your client’s, but it does not openly offer clients a commission refund.

Listing Services

  • MLS Listing
  • Zillow, Trulia, etc. Listing
  • Accept and Deliver All Offers and Counteroffers
  • Hold Open Houses
  • Professional Photography
  • Professional Floor Plans
  • Yard Signage Installation
  • Spare Key Lock-box Installation
  • Schedule Inspection Services
  • Schedule Private Showings
  • Closing Duties

Buyer's Agent Services

  • Find the Property
  • Accept and Deliver All Offers and Counteroffers
  • Recommend Other Professionals
  • Attend Inspection Services
  • Schedule Private Showings
  • Negotiate Needed Repairs
  • Closing Duties

Knock Editor's Review:

Knock is not an iBuyer. Knock offers a Trade-In program for sellers, where it buys a new home on client's behalf with cash while selling the old home on the open market.

Knock first evaluates how much client's current house is worth, then enters into a representation agreement to help the client find a new home on the market and makes a cash offer to buy the new home.

Knock most likely receives 2.5%-3% Buyers Agent Commission when it buys a home on your behalf, but it does not offer clients a commission refund.

Knock technically owns the new home and lets client move-in before it lists the prior home for sale. At this point Knock markets and sells the client’s prior home on the open market.

Once the client accepts an offer and the prior house is sold, Knock transfers the new house into the client's name. Knock then settles the added costs it incurred throughout the process.

Knock receives 6% commission to sell client's old house, half of which goes to the agent representing the buyer of client's prior home, plus Knock receives 2.5%-3% Buyers Agent Commission when it buys a home on client’s behalf.

Further, it accounts for all added costs it incurred throughout the process and bills these to the client separately. These fees make Knock proposition an expensive way to buy and sell a home with a lot of limitations.

The one thing that makes Knock a favorable proposition are potentially savings (Knock claims 5% off market value) with a new home due to benefits of a cash offer. It is possible that a seller of a new home may be willing to reduce the price in order to receive a guaranteed non-contingent offer, but it also may mean that the client is locked into a home that comes with a lower appraisal.

Knock has declined to state if the client who backs out from the purchase after Knock makes an offer would lose anything, including how much are these penalties, and how are these calculated.

For consumers, it is important to understand what happens when the appraisal comes in below the cash offer amount.

Currently, Knock operates in Atlanta, Charlotte, Raleigh, Durham, Dallas, and Fort Worth and the program is limited to single family residential homes, including condos and town-houses that can receive traditional financing for homes valued $150k or greater, or if the combined value of the old and new homes is at least $350,000-$400,000 without title, structural and permitting issues.

While Knock program comes with a lot of limitations and restrictions, it is a much better value-added proposition than selling a home to an iBuyer.

Knock fees are higher than a lot of competitive full-service agents, but they are also systematically less than the costs of using an iBuyer.

Because Knock does not take heavy risks of actually buying and holding client's homes, unlike an iBuyer, it is able to save most of the homeowner’s equity when selling.

Knock Service Areas:

Atlanta, Charlotte, Raleigh, Durham, Dallas, and Fort Worth