How does Knock.com / Knock Real Estate work in Atlanta? Learn what you need to know here.
Knock.com is known in the real estate industry as an “iBuyer”. What is an iBuyer you ask? In simple terms, it is a newly invented term used to describe companies that make automated offers to homeowners based on price models using tax records and local sales data. Other examples of iBuyers in Atlanta are Open Door Real Estate, & Offerpad. Each one of them are very different but this article will concentrate on the way Knock.com can help home buyers.
Knock real estate is primarily a trade in program and lender. One of the biggest challenges in selling a home is timing. Let’s say you are a home seller and you want to buy a home, but in a tight real estate market with low inventory you’re worried you won’t be able to find the next home. This is a common concern with home sellers in the Atlanta market.
Most Atlantans find it difficult to qualify to purchase a home without selling their existing home. Knock.com seeks to solve this problem by helping people who have a home to sell actually buy with Knock’s cash without selling their own home. Simply explained, here are the steps:
- You fill out a form on Knock.com’s website
- You use one of Knock.com’s agents to help you find a house
- Knock.com uses it’s 33 million dollars in private investor cash to make an “all cash” offer on the home you want to buy.
- Move into your new home and Knock.com will sell yours. They even offer to lend you the budget necessary to do minor repairs, etc.
- After the sale of your existing home, Knock will “settle up” with you. Meaning they will cash out your equity less their fees as well as move you into a more permanent mortgage.
What fees does Knock.com charge for their services?
Like a traditional agent, they charge 6% real estate commissions to sell your existing home. In addition, they get a commission of 3% when they help you buy a home. As of the time of this article, their agents are salaried employees versus traditional agents that work off of a full commission split in some way with the real estate brokerage office/company.
There are some convenience fees associated with Knock.com, which we have heard can range from an additional 3 to 5%. Knock will also loan you money to fix up or make minor repairs to your new OR existing home. Their website lists loan amounts of $10,000 to $20,000 as of this writing, but those amounts can change. We don’t know what the interest rates are on the short term loan. Other short term loan interest rates tend to be between 7 and 10%.
Just to clarify, Knock DOES NOT buy your home, nor do they want to. So if you’re relocating out of the area then you’re out of luck in terms of taking advantage of the trade-in program. They DO BUY your new home however, and it has to be transferred into the new owners name when the old house sells. This is done by using Knock’s mortgage company to get a new loan, paying cash with existing equity from old house, or using another lender of your choice to get a loan. Knock of course makes additional revenue if they can tie up the agent fees, loan fees, and interest paid per month on the mortgage.
Knock’s website uses a term “settle up” once they sell your old house and help you buy the new one. Those “settle up” fees include interest for short term loans, convenience fees, etc.
Who is Knock good for?
- Owner occupied homeowners who don’t want the hassle of doing minor repairs before selling
- Owner occupied sellers who want the convenience of buying before selling and are willing to pay a premium
- Your home’s value is between $150k and $500k – Knock’s required range
- Your home is well maintained and is something that a retail buyer would want to purchase
Knock.com doesn’t buy homes that have any of the following:
- Are in age restricted communities (such as 55 and older communities found in Atlanta Metro)
- Distressed homeowners or homes (houses that need more than $10k worth of work, foreclosure properties or those in pre-foreclosure
- Homes valued in Metro Atlanta over $500,000 or under $150,000
- Landlord owned properties or rented properties
- Homes with foundation issues
At the time of this article Knock’s site says that they will buy your home at their guaranteed price which is typically well below market value. Many articles have been published that this program is no longer available.
Knock isn’t for everyone, and they offer more of a trade-in service than an actual buy. They are also looking for houses that have been well maintained. If you have a fixer upper house, then selling to a local investor like Nice Guys Buying Houses may be a better option.
Nice Guys Buying Houses actually wants to buy your house today. So if you want a local Atlanta alternative to Knock.com feel free to reach out to us below. We are A rated with the Better Business Bureau and enjoy helping good people!
Here are some links to news articles on Knock real estate