✍️ Editor's take: Knock is a non-traditional lender that aims to increase flexibility in real estate transactions. Customers can make a non-contingent offer on a new home before selling their old one, plus receive interest-free loans for certain costs. However, Knock does come with some downsides — particularly that you'll have to pay back carrying costs (including overlapping mortgage payments) and that Knock's backup offers are only worth 80-85% of fair market value.
Knock is a lender whose signature service is a home trade-in option called Home Swap. This service attempts to solve a common problem: Many home buyers struggle to coordinate the timing of selling their old home before purchasing a new one.
Knock allows customers to purchase a new home and move in right away. Then, the company handles repairs and pays your mortgage until your home sells on the open market. It offers two loan services:
- You can get approved for a standard mortgage on your new home before selling your old one
- You can take advantage of an interest-free bridge loan that provides cash up front for the down payment on your new home and assistance with your old home’s mortgage and repairs
When you finally sell your old home, your old home’s mortgage and repair costs — plus Knock’s service fee — will be deducted from the proceeds.
Traditional lenders wouldn’t be able to allow this because two mortgages would make most home buyers’ debt-to-income ratio too high — and therefore risky — to approve.
Currently, Knock is available in 15 cities across six U.S. states. If you live within an eligible service area, there’s no obligation for applying to Knock, just as you would with any other lender.
Be sure to compare Knock’s fees, interest rates, and other terms to traditional lenders in your area so you can make an informed decision about what’s best for you.
Knock, at a glance
1.25% of new home’s purchase price + $1,450 for processing and underwriting
Up to six months
⭐⭐⭐⭐⭐ 4.8/5 (710 reviews)
15 cities across AZ, CO, FL, GA, NC, and TX
Launched in 2015 by the founders of Trulia, Knock was created to address the tricky timing issues homeowners face when selling their old home and purchasing a new one.
Knock attempts to solve this difficult problem by taking the role of a traditional lender. By using different criteria to approve customers’ home loans and offering cash up front, Knock is able to change the timeline of how a typical real estate transaction unfolds.
Rather than juggling a home sale and purchase, Knock customers can focus on one step at a time. Once you’ve purchased and moved into your new home, you can deal with preparing, listing, and showing your old home while it’s vacant.
In 2017, Knock raised a total of $44.5 million in combined Series A and Series D funding. At the time, Knock distinguished itself from other iBuyers by encouraging customers to sell their old homes on the open market. Unlike Opendoor and Offerpad, which make cash offers on homes, Knock planned to purchase just 10-20% of customers’ homes.
With time, Knock’s emphasis on open market sales grew. In June 2020, Knock began to focus on expanding its partnerships with established brokerages and local real estate agents. As of November 2020, Knock’s network featured 40 brokerage firms with more than 27,000 agents.
Today, the company declines to provide specific data but emphasizes that most customers sell their homes on the open market.
This is generally good for customers, who have the potential to receive more than their asking price in competitive markets. If a home fails to sell after six months, Knock will still provide a backup offer equivalent to 80-85% of the home’s fair market value.
Knock provides interest-free cash up front
In addition to a traditional home loan, Knock offers an interest-free Home Swap loan that provides cash before your old home sells.
This bridge loan can cover three things:
- Down payment (up to 20% of new home)
- Six months of mortgage payments on your old home
- $25,000 toward repairs or improvements to your old home
The exact numbers will depend on your home equity and market, but Knock advertises that customers can secure up to approximately $200,000 through Knock’s Home Swap loan.
Be aware that once you accept the Home Swap loan, Knock will place a lien against your property. You’ll have to pay the loan back in full, usually with the proceeds from your eventual home sale.
Additionally, Knock won’t give you the cash outright — instead, it will pay approved costs on your behalf. If unapproved costs come up while you’re selling your home, you’ll have to cover those yourself.
Knock allows you to make a contingency-free offer
In a typical home sale, sellers want to avoid anything that could cause the deal to fall through.
This is a problem for buyers, who typically contend with a major contingency: the need to sell their old home in order to secure financing. Buyers either risk missing out on homes due to this contingency, or cope with the inconvenience of moving into a temporary situation after selling their old home.
Knock’s approach aims to avoid this uncertainty and stress entirely. Because Knock can guarantee a buyer for your old home — in the form of its own backup offer — the company can offer greater flexibility in qualifying home buyers for a new mortgage.
This helps customers make more competitive offers on their next home, upping the chances that they can secure their first choice.
✅ You may want to use Knock’s Home Swap program if…
❌ You may want to avoid Knock’s Home Swap service if…
In a nutshell, Knock has to make the numbers work before agreeing to work with a customer. You’ll have to qualify for a conventional mortgage — and the expected proceeds from selling your old home will have to cover the loans and services Knock is providing.
As with any lender, Knock requires customers complete two screening processes:
- Step 1: Pre-qualification that estimates the approximate size of your loan
- Step 2: Pre-approval during which Knock offers the terms of your loan
Because Knock expects customers to sell their old homes on the open market within six months, the company also takes your old home into consideration.
The company’s criteria is flexible, but Knock typically wants to work with sellers who:
- Plan to sell and purchase their primary residence (not a vacation home or rental property)
- Plan to buy or sell a condo, townhome, or single family home
- Live within a current service area
Knock might deem your home ineligible if you:
- Live in a 55+ community
- Have significant water damage or foundation damage
- Lack recent, similar sales data in your area
- Have unpermitted additions
Additionally, Knock doesn’t currently accept distressed sales or bank owned homes. In these situations, you might want to consider working with a cash buyer.
Knock currently purchases homes in 15 cities across six U.S. states.
- AZ: Phoenix
- CO: Denver
- FL: Fort Lauderdale, Jacksonville, Miami, Orlando, Tampa, West Palm Beach
- GA: Atlanta
- NC: Charlotte, Raleigh-Durham
- TX: Austin, Dallas-Fort Worth, Houston, San Antonio
Yes — Knock is a legitimate business that offers loans to home buyers and sellers.
Knock earns money in two ways:
- Through its 1.25% service fee, which replaces an origination fee a lender would typically charge
- By selling loans in the secondary mortgage market — a standard practice that many lenders engage in
On its website, Knock also makes three promises: convenience, certainty, and cost savings.
We found that Knock appears to deliver on most of these claims. The service grants customers greater flexibility to coordinate the timing and logistics of their home purchase and sale.
Though Knock’s backup offers are only worth 80-85% of fair market value, it guarantees that your home will sell within six months. It’s also more transparent than comparable iBuyers, which claim to offer fair market value but decline to disclose specific data.
However, Knock’s ability to deliver cost savings may depend on your circumstances. Home sellers can complete repairs on their own or take advantage of Knock’s network of contractors, who may work for negotiated rates.
Knock’s bridge loan is also interest-free, making it an attractive option for those who need a cash advance.
However, it’s important to note that Knock’s approach to your old home’s mortgage falls under the category of convenience, rather than cost savings.
Knock customers don’t have to pay two mortgages simultaneously. But if you use Knock’s Home Swap loan to cover your old home’s mortgage, you will have to pay it back when your old home eventually sells.
Knock’s online reviews skew positive compared to most iBuyer companies.
As of February 2020, Knock has an average star rating of 4.8, according to 710 reviews on Zillow. Knock isn’t currently accredited by the Better Business Bureau but has an A rating with just one complaint.
Overall, customers appreciate the convenience of moving into a new home without having to deal with disruptive showings.
Coordinating the sale and purchase of two homes is a potentially overwhelming process, and some feel there’s room for improvement in Knock’s team-based communication and customer service.
It’s also important to note that many reviews name specific agents — so your experience will largely depend on your local area, which agents participate with Knock, and who you end up working with.
As always, we’d encourage you to interview several agents to find one who aligns with your personality and goals.
Step 1: Find an agent
Knock has no in-house agents, so you’ll work with a traditional real estate agent. If you don’t have an agent already, Knock has a network of “certified” partner agents who are familiar with its services. But if you already have an agent, Knock won’t turn them away.
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Step 2: See if you qualify for Knock
Applying to use Knock’s services is free, and you’ll have no obligation to accept its loan offerings. To start, fill out a brief, self-reported questionnaire on Knock’s website.
The form will ask basic questions about your financial situation. Within 48 hours, Knock will let you know if you’re pre-qualified — and if you are, you can move on to pre-approval.
At this stage, you’ll complete a formal mortgage application and submit official documentation so Knock can evaluate your background and prepare an offer. Within 48 hours, you’ll know whether you qualify for a home loan to purchase your next home.
Step 3: Review Knock’s offerings
If you qualify for Knock, you’ll receive all the specifics of what the company can offer.
Knock currently offers conventional, jumbo, and in some cases, VA home loans, as well as its Home Swap bridge loan. The exact amounts are based on Knock’s evaluation of your old home’s equity and how much you plan to put down on a new home.
You’ll also receive Knock’s backup offer, which is typically 80-85% of fair market value for your old home and is valid for six months.
Step 4: Purchase and move into a new home
If you decide to move forward with Knock, you begin your home search knowing that you can make a non-contingent offer on the home of your choice.
Once you purchase your new home, Knock will take over the mortgage payments on your old home, so you won’t have to cover two monthly payments at once.
Step 5: Prepare, list, and sell your old home
Once your home is vacant, you’ll have a 45 day window to make any repairs or improvements. You’re free to use Knock’s network of contractors, or you can handle these repairs yourself.
When your home is ready, your real estate agent will handle the process of listing, marketing, and showing your old home, just as they would in a traditional sale.
You’ll have six months to find a buyer for your old home — which gives you an opportunity to get the most competitive offer possible.
But if your home doesn’t sell, you’ll have to pay off Knock’s Home Swap loan after six months. For most sellers, this means accepting Knock’s backup offer, though the company says this is rare.
Step 7: Settle your bill
You won’t have to pay Knock’s fees until you sell your home. When you receive the proceeds from your home sale, Knock will deduct its interest-free Home Swap loan and service fees.
Keep in mind that you’ll also need to pay all the usual costs associated with selling your home at this time, including realtor commission and closing costs.
The convenience of using Knock comes at a slightly higher cost than a typical lender. Though Knock’s 1.25% service fee is comparable to a lender’s origination fee, most leaders charge 0.5-1% of the cost of your new home.
For example, if your new home costs $200,000, you’d pay a $1,000-2,000 origination fee, compared to Knock’s $2,500 service fee.
Knock also charges a $1,450 fee that covers processing and underwriting.
These fees, plus your mortgage payoff and the bridge loan, are deducted from your final proceeds.
Keep in mind that you’ll also have to pay all the typical costs of real estate transactions, including closing costs, realtor commission, and more.
Processing and underwriting fee
Standard 5.45% when you sell your old home
Repairs or upgrades
Varies; Knock offers an interest-free $25,000 advance
How does Knock compare to alternatives?
Knock isn’t the only home trade-in service on the market. Since 2017, Orchard (formerly called Perch) has also offered similar services.
Below, we broke down the key differences between the two services. We also wrote an in-depth review of Orchard’s risks and benefits.
Average customer rating
15 cities across AZ, CO, FL, GA, NC, and TX
9 cities across CO, GA, NC, and TX
Find your own agent
Can you move before selling?
Assistance with repairs
Interest-free Home Swap loan (up to $25,000)
Repair/upgrade costs are deducted from profits
By positioning itself as a lender, Knock wants to distance itself from iBuyers — a group of companies that use technology and in-house real estate expertise to make cash offers on homes.
There are two key differences between Knock and iBuyers:
- Offer price on your old home
Knock customers work with real estate agents to sell their homes on the open market. This allows you to potentially receive more than your asking price — or at least a competitive offer.
By contrast, iBuyers typically offer fair market value at most. You won’t have much room to negotiate.
On the flip side, iBuyers can move much faster than Knock. Most can provide an initial cash offer within 24-48 hours, and you can close on your home in as little as 10 days.
Knock changes the timeline of a real estate transaction to provide more flexibility, but you should still anticipate spending around 25 days to find a buyer for your old home, plus 30-45 days for closing.
TechCrunch. "Raising a $32M Series A, Knock seeks to stand out with new model for selling homes." Accessed March 12, 2021. Updated January 31, 2017.
Forbes. "Knock Home Swap: A Timely Solution For Home Sellers Who Are Also Home Buyers To Bid Competitively." Accessed March 12, 2021. Updated November 23, 2020.
Inman. "Want to win the bidding wars? Here’s how." Accessed March 12, 2021. Updated February 22, 2021.
Knock. "Frequently Asked Questions." Accessed March 12, 2021. Updated 2021.
Investopedia. "Origination Fee." Accessed March 12, 2021. Updated August 27, 2020.