Knock, best known for its bridge loans to help buyers buy before they sell, now has a product for first-time homebuyers. Knock GO (Guaranteed Offer) is a cash-backed home loan solution for first-time homebuyers looking to compete in today’s hot housing market. With Knock GO homebuyers in 65 markets nationwide can now make a non-contingent, cash-backed offer to win their dream home with the added assurance Knock is there to bridge the gap should the appraisal come in below the sale price
In an exclusive RealTrends interview with Sean Black, founder of Knock, he says, “Our flagship product, Knock Home Swap, we help people who already have a home buy the new home before they even list their old one. Knock GO is for everyone else who doesn’t have a home to sell, but also isn’t very competitive in the market today,” he says. He notes that many markets have consumers making three or four offers on a home before one is accepted. “That’s demoralizing and discouraging for the consumer, but it’s also a lot of work for the agent who has to spend two hours writing an offer, and then start over [when the offer isn’t accepted.]
Black notes that, “Even if they’re [the buyer] not clear to close on the day we promised, we’ll come in and fund that property ourselves, still in the customer’s name. We’ll just figure out the mortgage after the closing happens.” While developing the product, says Black, “we figured out appraisal gap insurance is a big deal. Now, 15 to 20% of homes are coming in under the price of the contract. That means the consumer has to come out of pocket, on average, I think it’s $14,000 to $15,000, or they lose the home. So, we built in an appraisal insurance that will give you a credit up to 3%, basically your closing costs on the new home, to help offset any gap between the contract value and the appraised value.”
Designed specifically for first-time buyers and others who don’t have a home to sell, Knock GO combines a cash-backed, competitively priced conventional mortgage with a closing guarantee and appraisal protection, giving buyers and their agents the ability to make an offer that will stand out from other offers. Knock GO is backed by the company’s guarantee that it will fund the loan in the event it isn’t 100% clear to close in 30 days and help offset the difference between the sale price and the home’s appraised value at no additional cost.
“In today’s housing market many buyers are losing their dream home to offers that waive financing, appraisal and other contingencies. Both buyers and sellers need to be guaranteed that their transaction is going to close, and Knock GO™ provides the certainty it will,” said Knock Co-Founder and CEO Sean Black.
Founded in 2015, Knock’s flagship Home Swap™ empowers homeowners with the certainty of a non-contingent offer to buy the home they want before selling the house they have for top dollar, giving them the convenience of not having to live through repairs or showings or sell to investors at a discount. With the introduction of Knock GO™, Knock is expanding its reach to all homebuyers whether they are looking to both buy and sell or just buy a home.
Similar to Knock Home Swap™, Knock GO™ is a fully digital experience available through more than 250 leading brokerage firms with over 100,000 agents in 65 markets nationwide. Homebuyers also can learn more and see if they qualify for a Knock GO™home loan at knock.com/go.