Selling your home is a long, grueling process — paperwork, agents, open houses and so much more. Knock simplifies this tedious process by guaranteeing that you’ll get full market price and that your home will be out of your hands within six weeks. Best of all, if Knock doesn’t sell your home within that time period, they will buy it from you.
So far, that guarantee is solid. Knock has sold 90 percent of the homes so far within the six-week window and are on track to sell at least 350 homes in Atlanta, their first market, this year.
Before Knock, the leadership team was on the founding team at Trulia — the online and mobile real estate market — so they know a thing or two about real estate. “Our mission at Trulia was to democratize the information that buyers needed to make the biggest financial decision of their lives,” says Sean Black, co-founder and CEO. “Unfortunately, the same hasn’t happened for the sell side of the equation. The sales process is still completely offline, totally opaque and very inefficient.”
At the center of this enterprise is Knock’s proprietary winning algorithm, Black tells Hype more about how their technology nails that magic market price, how they are changing the selling marketplace, and what’s next.
You just closed a large round of Series A funding. How do you hope to leverage these funds within the company?
Our plans for this funding is to build our technology platform even more — we’ve already tackled a lot of the pricing algorithm that the seller sees but there is much more to do to make the entire end-to-end process online. In addition to tech investments we’ll expand into additional markets and be able to guarantee even more homes.
What problem are you solving with Knock?
The problem we are solving is illiquidity — 47 percent of home buyers need the money out of their existing home to make the deposit and get the mortgage on their next home. It is a classic catch-22. Knock fundamentally changes the face of home selling by utilizing technology to guarantee market price for your home in 6 weeks or less, even if Knock has to buy it.
How does the Knock algorithm work and what are its advantages? Is the Knock process similar to the traditional home selling process?
Knock uses proprietary data like our 200-point onsite inspection to price homes. The process looks like this: if you put in your address we can immediately pull up all the public data about your home. The seller then provides additional information about renovations, improvements and other features. This allows our algorithm to provide a narrow price range. Once our inspector completes our free 200-point inspection we can value the unique attributes of home and determine the exact market price.
As a customer, what are the benefits of using Knock? What’s the Knock warranty?
To maximize offers we prep and market your house extensively for six weeks. If your house doesn’t sell in six weeks you can sell it to use for the guaranteed price. Knock also streamline the logistics of showing the home, arranging paperwork and coordinating the closing online.
What is the revenue model?
Right now there is more than $66 billion paid each year in real estate commissions. We think this is way too much and we believe that with our model we can accurately price your home and sell it faster and easier and for the same six percent you’d pay a traditional real estate agent. Knock acts as the listing broker for the seller and we market properties to hundreds of millions of buyers.
Do you currently have any direct competitors? How does Knock stand out?
The only other companies disrupting the traditional way of selling a home are Opendoor and Offerad. But Knock appeals to a much larger segment of homeowners than online home flippers. That model requires significantly more capital and costs sellers 15-20% of their home’s value. We’re not flipping houses so we can operate on the same 6 percent as traditional listings while bringing a tremendous amount of value to the home seller with our online platform and guarantee.
As a startup veteran, what are some lessons you learned so far, from funding to leadership?
That’s easy, but also a little cliché. Don’t be afraid to think and act big. It is more competitive than ever, so you truly need to be 10x better than the status quo to break through the noise.
What’s next for Knock in the 6-12 months?
We are excited to double down on Atlanta and roll out new markets later this year. As we take on each market we’ll be moving closer towards a goal of being national and focusing on emerging cities that look a lot like Atlanta. The name of this game is liquidity, which will allow us to scale quickly.