Online real estate veterans Jamie Glenn, Sean Black and Karan Sakhuja have launched a new consumer real estate business dubbed Knock. It takes a page or two from Opendoor, which is innovating in the online real estate space with homeseller guarantees.
Here is it how it works: Consumers come onto the site or app and request a “price guarantee” to sell their home. Knock then offers a price for the home.
If it is accepted by the seller, Knock takes professional photos, aerial video of the house’s exterior and a full-immersion virtual reality video tour.
Knock promises to pay to promote it to millions of buyers searching the local MLS, Zillow, Trulia, realtor.com and Yahoo.
A screencap from the Knock website.
Whether you accept an offer from a buyer or take Knock’s guaranteed price, the company promises to handle all of the details, including arranging escrow and closing.
Knock is in the business, in effect, of flipping your home if it cannot find a buyer.
If Knock buys your home and then sells it at a higher price within 30 days, the company promises to give you 100 percent of the difference, less a fee (which is not disclosed on the site).
The guarantee: “If we lose money on the sale, you keep 100 percent of what we paid you.”
The marketing promise: “The only foolproof, full-service way to sell your home.”
The Opendoor promise: “With Opendoor, your home is sold the minute you’re ready.”
Jamie Glenn
The three founders include Jamie Glenn, who was product manager at Trulia and worked previously at Yahoo! in the real estate and classifieds area. He also founded a predictive analytics educational technology company, Uversity, which was sold.
Sean Black
Acting as CEO is founder Sean Black, who also worked at the Trulia in the very beginning. More recently, he started and sold a sale analytics company called Crunched.
Karan Sakhuja
Lead engineer is co-founder Karan Sakhuja, who was most recently at homeASAP and real estate lead generation start-up N-Play.
The company has attracted some marquis venture capital firms, including Redpoint, RRE Ventures and Greycroft.
What the founders say
“We are picking up where Trulia left off in terms of disruption,” said Black. “Trulia never intended to get into the transaction.”
“There is nothing really focused on the sell side, but that is where there are lots of opportunity,” said Glenn.
Other than Opendoor.
“Opendoor is great if you’re in a hurry. But most sellers need time and want to feel good that they got the best possible price. We have their back,” said Black.
They give sellers two prices — a suggested list price based on the data and their algorithm. Then, after the inspection, they do a purchase contract that acts like a “put” on the property and is not executed until after a six-week listing agreement expires if the home does not sell. Usually, that purchase agreement price is lower than the original list price.
With Knock yard signs promoting the price guarantee, the company charges the seller 6 percent. Knock is a licensed brokerage; it puts the property on the MLS and cooperates with buy-side agents.
“We are trying to be pro-consumer and pro-seller,” said Glenn.
They expect to buy 25 percent of the properties with debt and equity. They plan to use VC funds for equity and use hard money debt lines to fund the purchase.
They have been testing their model in Atlanta and plan to move out from there.
“We promise more transparency and peace of mind for the sellers — once you own the transaction, you can do all sorts of interesting things,” said Black.
