One of the most challenging aspects of home ownership is selling an existing property while buying a replacement. It can be a very stressful and sometimes impossible task due to financial constraints and undesirable contingencies.
In a “normal” market, purchasing the new home with a “Contingency on Sale” of the old home is an acceptable alternative, and “back to back” closings are more feasible.
However, in an under-supplied “Hot Market” many buyers are competing for a few properties and sellers will not look favorably on such contingencies. Buyers that include a contingency on sale will likely lose out, unless they are willing to pay a large premium and waive the appraisal contingency, which many buyers cannot (or are not willing to) do.
Enter the “Knock Home Swap” program, which aims to solve this common conundrum by giving homeowners useful tools to compete.
How does Knock Home Swap work?
- Qualify existing home
- Property must be located in one of Knock’s service areas (Charleston, SC is an approved service area).
- Only single-family detached residences, condos, or townhomes (that are eligible for traditional home loan financing).
- Title must be marketable and held by seller.
- Must be owner-occupied or vacant (no tenants).
- Must value home at $150K or higher.
- Get pre-approved to purchase next home
- Knock must be the lender for the new purchase. They provide competitive interest rates.
- Maximum loan amount is the conforming loan amount for each county (for Charleston County $548,250 as of May, 2021).
- Get pre-underwritten and approved for new home loan including downpayment assistance, to be able to make fast offers.
- Buy your next home
- The new home must also be in a Knock service area.
- It cannot:
- Be in an age-restricted community;
- Be a distressed sale or bank-owned property; and
- Have a solar lease, non-permitted additions, or significant foundation or water damage.
- Write a winning offer, close and move into the new home.
- Only pay for new mortgage. Knock will advance you up to six months for the old mortgage payments, plus up to 5% for down payment assistance.
- Knock’s “convenience fee” of 1.25% can be rolled into new mortgage.
- Sell old home
- Prepare the home for sale. Knock will advance up to $25K for repairs/renovations, up to six months (interest-free) and preparation so you can get a top price for your old home.
- List and sell your old home for a top market price using your preferred Realtor (who must be a Knock Certified Agent).
- Once your old home sells, you pay back Knock for any monies advanced, such as down payment assistance, mortgage payments, and home preparation costs.
Why Should I Use Knock Home Swap?
- Allows you to make offers without including a contingency on sale, which lets you compete more aggressively with other buyers.
- Lets you time your move to your convenience before selling the old one, avoiding having to rent and move twice. Helps you save on rent, storage and moving costs.
- Lets you skip having to live through repairs & renovations .
- Lets you skip having to keep your home immaculate and present it as a perfect showroom day in and day out through innumerable buyer showings.
- Lets you maximize the selling price of your old home by preparing the home for sale for optimum saleability, without having out-of-pocket expenses. This price difference alone could presumably cover their convenience fee.
- Lets you sort out your family housing logistics without trying to juggle two mortgages at once.
Want to learn more?
Call us on 843-900-0155, or book a FREE, NO-OBLIGACTION one-on-one Zoom consultation here.