nav
Business Operations Business Models

How Does Knock Make Money (Business and Revenue Model)

The Knock business model

Knock logo
Here’s what you should know:
  • What is Knock, and how does Knock work?
  • How does Knock make money?
  • Convenience Fees (Loan Origination Fees)
  • Reselling Mortgage Loans
  • Knock profit and revenue
  • What is the Knock business and revenue model?
  • Knock funding, net worth, and valuation
  • Knock subsidiaries, acquisitions, and exits

How does Knock make money? Well, here is a full, in depth, breakdown of their two (2) revenue streams and the different products and services they offer, as well as the Knock business and revenue model, how much money Knock makes per year, and how Knock works.

What is Knock, and how does Knock work?

Knock is an innovative home solution that provides bridge-like loans for buying and selling a home.

Founded in 2015 by Jamie Glenn, Karan Sakhuja, and Sean Black, Knock now is now operational in more than 15 states and 75+ cities across the United States, to date.

So, how does Knock work? To get a loan through Knock, simply head over to their website and tap on “Get Started.”

From there, Knock will ask you to first choose whether you’re buying and selling a home or only buying – this will determine the type of loan you’re applying for. Once you pick the one your looking for and fill out their online application, approved applicants will get a down payment advance with your underwritten home loan so you can start making offers right away.

Some of Knock’s competitors include Opendoor, Zillow, Better Mortgage, Rocket Mortgage, and other companies that originate mortgage loans.

How does Knock make money?

Knock has not released any information regarding how many customers or how many loans they have originated in the past year or since its founding back in 2015. But, how does Knock make money off of these loans?

Below is a breakdown of how much money Knock makes and its revenue model. Including all revenue streams and how much they charge for their services.

Here are the 2 ways of how Knock makes money in 2022

Knock has a revenue model that makes money in two (2) ways; from loan origination fees they charge the borrower and then by reselling the loans for a fee on the secondary mortgage market.

#1. Convenience Fees (Loan Origination Fees)

One of the ways Knock makes money is by charging borrowers loan origination fees, or “convenience fees” as Knock calls them, on every loan they originate.

Knock offers borrowers two (2) types of loan products to choose from; Knock GO and Knock Home Swap.

Knock GO is for borrowers who are only buying a home and with this service, Knock charges a 1.25% loan origination fee, or convenience fee. While Knock Home Swap service is a bridge-like loan for borrowers who are buying and selling a home and with this service comes the standard 1.25% loan origination fee plus an additional $1,450 administrative loan fee.

How much are Knock Home Swap fees? (Knock.com fees)

  • 1.25% convenience fee of the new home’s purchase price
  • plus an additional $1,450 administrative loan fee for borrowers using their Knock Home Swap service

Note: Knock’s origination fee is 25% to 150% higher than the 0.5% to 1% average loan origination fee.

#2. Reselling Mortgage Loans

Knock also makes money by reselling the loans after closing.

How does Knock make money from this? Once Knock originates and closes a borrower’s loan, Knock then turns around and makes more money by selling those loans on the secondary mortgage market to another lender for a fee for the loan’s rights. Although it’s unclear how much that fee is on average.

Note: Knock makes money on the frontend with loan origination fees, and on the backend when they resell it to lenders for a fee.

Knock profit and revenue

Knock has not released any official reports in regards to company earnings.

Note: Because Knock is a privately held company, they are not required to make their annual reporting, such as Form 10-K’s, pubic.

What is the Knock business and revenue model?

Knock makes money through a few revenue models that they combine within their company, they are:

  • Fee for service (FFS) business model
  • Business to business (B2B) business model
  • B2B2C (partnerships) business model

Knock funding, net worth, and valuation

Knock’s Crunchbase profile shows Knock has raised $874.5 million over 9 rounds and has a valuation of $2 billion as of June 2022.

Knock subsidiaries, acquisitions, and exits

To date, Knock has not made any acquisitions, investments, or exits.