RALEIGH — How can people wanting new homes get the one they want in a red-hot market without having to sell theirs first?

High-tech real estate startup Knock thinks it has the answer to these problems:

  • It’s common to see homes in the Triangle and Charlotte get listed one day, then go under contract to sell above the list price in less than 24 hours—often with no contingencies. In a competitive real estate market, the offers to purchase that are most likely to be accepted by sellers are ones that are certain to close; in other words, where the home buyer does not have to sell their current home prior to closing on their new one.
  • Because real estate is so competitive right now, Knock also says many potential sellers have refrained from listing their homes due to the uncertainty of locating another home to purchase and thus risking a competitive offer process to an all-cash buyer such as from an instant-buyer or “iBuyer.”

What’s a owner to do?

Knock says check out Knock Home Swap.

“The only way to revolutionize the real estate industry is by addressing both home buying and selling,” Sean Black, co-founder and CEO of Knock, told WRAL Tech Wire in January 2019 after the company closed a $400 million in funding. And the new plan is part of that mission.

Knock says it relies on a mix of proprietary technology to accelerate real estate deals to benefit real estate consumers through enabling licensed real estate agents to offer the Home Swap program that includes bridge loans and a technology-enabled repair process that leverages a network of approved contractors.

This program is similar to what Ribbon, another tech-focused real estate startup, has offered. The concept enables buyers working with agents to make “all cash” “no contingency” offers on a new home purchase for a “hassle free” move.

Both companies, by the way, insit they are not “iBuyers.”

The Knock Plan

Here’s how the Knock plan works.

Starting today, Knock is offering homeowners in Charlotte and Raleigh who are also planning to purchase a new home the Knock Home Swap to facilitate real estate transactions for buyers and sellers, with an emphasis on focusing on those who are completing both sides of a real estate transaction simultaneously for two different properties.

“The Home Swap gives home sellers a fighting chance in today’s market so they have the confidence to move forward,” says Jancie McDill, a spokesperson for Knock.  “You can’t win in the current market with a contingent offer.

“The Home Swap definitely gives agents another tool to help their clients,” she adds.  “Two-thirds of buyers are also home sellers, and they need to use the equity in their house to buy a new home.”

Because the markets in Raleigh and Charlotte are so competitive right now, says McDill, many potential sellers have refrained from listing their homes due to the uncertainty of locating another home to purchase and the risk of losing a competitive offer process to an all-cash buyer.

“Inventory across the Carolinas remains tight, making the markets we serve extremely competitive and creating multiple offer situations,” adds Eb Moore, CEO of Wilkinson ERA Real Estate and ERA Live Moore, a North Carolina real estate brokerage firm whose agents are Knock Certified Agents.  “The Knock Home Swap program in our Charlotte and Raleigh markets will give our agents a compelling tool that will allow them to help their clients win in multiple offer situations. In addition, it will help to ease some of the stress of buying when you have a home to sell, leading to a better consumer experience overall.”

The details

Here’s what the program provides:

  • A fully integrated and competitively priced mortgage

  • An interest-free bridge loan which can cover the down payment on the new home as well as mortgage payments

  • Up to $25,000 for repairs, staging costs, and other preparation services to ensure the consumer’s former home is best positioned to receive top-of-market value.

  • Access to an approved contractor network

  • Manages the payment of all of the bills with consumer approval.

  • Most importantly for consumers, Knock adds, is that the company also provides a guaranteed backup offer on the homeowner’s former house in the unlikely event the home doesn’t sell within six months.

According to Knock, 90 percent of Knock homes sell withing 90 days or less on the market.

The Home Swap program first became available in three other real estate markets in July. It replaces the company’s earlier “Trade-In” program from Knock, which entered the Raleigh and Charlotte real estate markets in 2018 and began offering the “Trade-In” program.

Home Swap operates through Knock Certified Agents, who receive certification after training and the successful completion of an exam, and who must be licensed in North Carolina. Knock also expects agents to have an excellent understanding of local neighborhood real estate markets.

As for sellers, “Knock sold our home within a week,” reads a testimonial from Arthur and Lisa, who participated in Knock’s “Trade-In” program in the winter of 2018.  “That’s the dream; it’s the ideal situation.  They delivered on what they said they would do.”  The company says that 90 percent of Knock homes sell in 90 days or less.