Anyone heard of Knock Home Swap? (home buying program)

[ktgrok]

I'm intrigued. The idea of getting this house ready to sell is overwhelming, and we were already looking at getting a home equity loan to fix it up. Add in trying to stage/sell a house that is 1500 sq ft with 6 people and 5 animals in it full time....yeah. This is appealing, if we would qualify. Basically, you apply through them for a mortgage on the new place, and they also lend interest free the money for the down payment and mortgage payments on old house. You move into the new house, make any improvements on the old one with up to 25,000 in loan from them - and then sell your old house, paying them back. Anyone hear of this? Scam, or new bright idea? https://www.knock.com/faq

 

[JustEm]

My biggest question would be how much is the fee for borrowing that interest free money to fix up your old house?   Bridge loans aren't a new concept.  I don't know if that I would be willing to do it because there is no guarantee that the amount of money you borrow from them to fix the house up will be earned back during its sale.  Then you owe them the difference. And if you needed to borrow money for a down payment and to fix up your house, chances are you can't afford to owe them money after the fact.

[JustEm]

Here is the biggest concern for me from their FAQ

What happens if my old house doesn’t sell on the market?

With the Home Swap, you’ll list your existing house on the market after you’ve purchased and moved into your new home. The goal is for you to sell your listing on the market for max value with your agent. That said, on the off chance your listing doesn’t sell on the market, you’ll have the option to take an offer from Knock that we provide you up front.

 

 

 

[JustEm]

Lastly,  in this market how much work do you really need to do on the house to sell it?  In many areas, houses are flying off the market in seconds even without any work being done. Have you looked into that.

[ktgrok]

3 minutes ago, hjffkj said:

Lastly,  in this market how much work do you really need to do on the house to sell it?  In many areas, houses are flying off the market in seconds even without any work being done. Have you looked into that.

We need to finish rennovating the guest bath which is still torn down to studs, for sure. Other stuff is more cosmetic. 

[JustEm]

1 minute ago, ktgrok said:

We need to finish rennovating the guest bath which is still torn down to studs, for sure. Other stuff is more cosmetic. 

Gotcha, if other things are cosmetic I'd pick cheapest reno of that bath possible, clean like crazy, and list.

[ktgrok]

Just now, hjffkj said:

Gotcha, if other things are cosmetic I'd pick cheapest reno of that bath possible, clean like crazy, and list.

Issue is that without a loan, DH does the work himself, and he never seems to have time to finish it. And of course, trying to list a house with 3 large dogs, 2 cats, and a pile of kids. In a pandemic. 

[JustEm]

1 minute ago, Thatboyofmine said:

I would put my focus into the bathroom and call it good.    Houses are going fast here, as well.    But it feels like the downturn is coming soon.   That's just my gut feeling.  🤷🏻‍♀️

I think it is coming by fall at the latest.  I think one more selling season is going to be the last.  Or it'll start strong in March and by June it is over.

[JustEm]

Just now, ktgrok said:

Issue is that without a loan, DH does the work himself, and he never seems to have time to finish it. And of course, trying to list a house with 3 large dogs, 2 cats, and a pile of kids. In a pandemic. 

Seriously, in this market that doesn't matter. People are making offers on houses with a simple virtual tour regularly.  But even if they don't you set up the virtual tour, set a day for viewings a few days out from listing and only allow them on that day.  Then if you need you just have one day a week available for viewings.  If your market is like ours your house will sell fast if priced right.  95% of houses in our market are under contract within 48 hours here. The other 5% are way overpriced or have some odd contingency.

[ktgrok]

Just now, hjffkj said:

Seriously, in this market that doesn't matter. People are making offers on houses with a simple virtual tour regularly.  But even if they don't you set up the virtual tour, set a day for viewings a few days out from listing and only allow them on that day.  Then if you need you just have one day a week available for viewings.  If your market is like ours your house will sell fast if priced right.  95% of houses in our market are under contract within 48 hours here. The other 5% are way overpriced or have some odd contingency.

Well, that's good. Except I'm terrified of finding a house to move into then, lol. If we had somewhere to go in the meantime, then ideally we'd sell in this hot market then wait and buy when it cools down, lol. 

[JustEm]

2 minutes ago, ktgrok said:

Well, that's good. Except I'm terrified of finding a house to move into then, lol. If we had somewhere to go in the meantime, then ideally we'd sell in this hot market then wait and buy when it cools down, lol. 

look for a rental?  That is what our neighbors will be doing in the spring.  They're selling their house to my brother. hopefully at least.

[Frances]

6 minutes ago, hjffkj said:

I think it is coming by fall at the latest.  I think one more selling season is going to be the last.  Or it'll start strong in March and by June it is over.

Because interest rates are going to rise or due to something else? Savings are up significantly since many of the normal avenues for spending are shut down at least partially and there are still serious housing shortages in many parts of the country, including mine. 

[mommyoffive]

3 minutes ago, ktgrok said:

Well, that's good. Except I'm terrified of finding a house to move into then, lol. If we had somewhere to go in the meantime, then ideally we'd sell in this hot market then wait and buy when it cools down, lol. 

Can you rent? 

[mommyoffive]

Just now, Frances said:

Because interest rates are going to rise or due to something else? Savings are up significantly since many of the normal avenues for spending are shut down at least partially and there are still serious housing shortages in many parts of the country, including mine. 

Experts are saying that the economy is going to fall

[ktgrok]

Renting is hard mostly due to the pet situation. Most landlords are not keen on the idea of 5 animals moving in. 

[Frances]

Just now, mommyoffive said:

Experts are saying that the economy is going to fall

That’s not what I’m reading, more like predictions of a post war boom with a surging economy. There is concern about inflation though and how that and increasing interest rates could affect the housing market is what I’m wondering.

[Bootsie]

Knock is a technology company creating innovative home loan products, like the Knock Home Swap™, to enable people to easily buy their new home before selling their existing one on the open market with their preferred real estate agent.

The "we are a technology company" always concerns me--that is the trendy thing to say that is really meaningless.  The service they are providing has nothing to do with technology.  It is a money advance.  

I would be interested in knowing just how competitve their rates are.  Although they say that you are not paying to mortgages (as you do not have the cash flow leaving your pocket at the time) you in essence will be until your house sales.  You buy new house and pay your mortage, say $2000 per month.  They pay your existing mortgage, say $1500 per month--when you sell the existing home for $200,000 they will deduct $1500 times the number of months they paid your mortgage for you from the 200,000, thus, you are in essence paying the $1500 each month, it just isn't hitting your monthly cash flow.  I am not sure what the tax deductibiity of some of their fees compare to a regular mortgage would be. 

[JustEm]

Ok, well back to the knock home swap.  Have you researched what the fee is for that interest fee loan?  They can't possibly make money on a the fee from the new home mortgage and selling the mortgage.  They have to make money off that money they loan you. It would make no sense if they didn't.  Unless they are banking on people not being able to sell their old house so they get it for cheap

[Ausmumof3]

6 hours ago, ktgrok said:

I'm intrigued. The idea of getting this house ready to sell is overwhelming, and we were already looking at getting a home equity loan to fix it up. Add in trying to stage/sell a house that is 1500 sq ft with 6 people and 5 animals in it full time....yeah. This is appealing, if we would qualify. Basically, you apply through them for a mortgage on the new place, and they also lend interest free the money for the down payment and mortgage payments on old house. You move into the new house, make any improvements on the old one with up to 25,000 in loan from them - and then sell your old house, paying them back. Anyone hear of this? Scam, or new bright idea? https://www.knock.com/faq

 

Is this basically a bridging loan?  Some relies of dhs apparently had one of them when interest rates went sky high and lost their house and got set back for years, according to the family story.  I’m vague on the details but I’d be fairly cautious.

[Bootsie]

According to this Knock Home Swap: Buy, Sell, a Get a Mortgage with Just One Company | The Truth About Mortgage They will advance six months of your current mortgage.  The downpayment they will advance is 5% of the new home.  So, if you want to put more than 5% down, you would need to come up with cash from another source.