It's now possible for homebuyers in the Seattle region to buy a new house before they sell their current one.
Non-traditional lender Knock on Tuesday formally launched its Home Swap program in the region. Home Swap provides 100% of the money needed to buy a new residence using what the company said is a competitively priced mortgage and an interest-free equity advance loan.
It covers the down payment on the new home, money to prepare your existing home to go on the market and up to six months of mortgage payments on the old house.
Knock has a backup offer program on the old house in the event it doesn't sell within six months.
New York City-based Knock also is introducing in the region Knock GO for first-time buyers as well as the addition of jumbo loans to the company's product portfolio. GO stands for Guaranteed Offer, and makes first-time buyers' offers competitive with cash buyers, according to Knock.
In Washington state, the programs are available from Bellingham to Tumwater, including Bremerton.
For many buyers in recent years, the process of selling a home to buy a new one has been "a riddle," said Tim Tilbury, a principal/broker at Velocity Real Estate in the Keller Williams network.
"They couldn't sell because there was nowhere to go," he said. "Even if they were to sell their property, it would be so competitive to move into the next property they didn't want to get stuck in between without home."
It's a vicious cycle with hesitancy to sell contributing to the overall tight market. According to the Northwest Multiple Listing Service, there were only 1,769 single-family homes and condos available for sale at the end of March in King County, with a population of 2.25 million.
Tilbury estimated that over the last two years, 30% of clients in his 250-agent Keller Williams network could have benefited from Knock's Home Swap.
"We have our first client going through the process right now and from everything that we're looking at and from what has been explained to us, the flat fee is actually less expensive than a traditional lending broker," he said.
Tilbury is unaware of a lender that offers programs like Home Swap and GO. He said it's "really exciting because people need help, and people that need the most help don't have as much liquidity to use at the drop of a hat to win in a multiple-offer situation."
In addition to some Keller Williams brokerages, Knock is offered through John L. Scott in Renton, Kent North and Mill Creek and Everett, Professional Realty Services International and Century21 North Homes Realty in Lynnwood.
