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 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.
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.
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