Advantages and Disadvantages of Open Houses
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Many of us know that hosting an open house is one of the oldest tricks when trying to sell your home. However, just because open houses have been used to market property for sale, does not mean that they are an effective selling technique for every home. Before deciding whether an open house can help you sell your home, it is crucial to consider the advantages and disadvantages of an open house.
Open houses in real estate is a hotly debated topic for homeowners and real estate professionals. Some sellers and agents will indeed insist that open houses are something that will sell homes, others will not want to hold an open house, and some will be on the fence and only do it from time to time.
What is An Open House?
The sale of open houses in residential real estate is an old tradition of showing the home to more than one customer. There is a set day and block of time that the agent holds the open house and anyone is welcome to come during that time to tour the house. Usually, there are incentives for people to come such as food, drink, and prizes. Agents set up signs to attract traffic on roads or near street corners and usually list houses on the newspaper’s real estate pages to attract more people. Ultimately, your goal is to find a buyer.
Advantages to Holding Open Houses
Open houses can provide good exposure for listings. Social media announcements can grab attention and drive people to the open house. Neighbors can also let their family and friends know about the open house. Drivers or pedestrians can also see the signs and note new homes featured in the market.
Holding an open house can be an effective way to show off properties. Instead of customers coming through the home for sale one at a time, you can show more people the home in the short term period if the open house is well attended.
Sellers may view an agent holding an open house as proof you are doing your best to promote the property. Even if an open house is not productive, sellers will see their agent’s efforts. When a house comes onto the market, an open house can serve as a “kick-off” event to promote the property to a pool of potential buyers. You can meet potential customers and introduce your services to them. Even if visitors aren’t interested in the open house property, they might want you to show them other properties.
Open To All
Open houses are not only for potential buyers. Brokers and agents who want to team up on sales and advice on ways to help sell a home faster also come. There are three people to whom you can sell a house: the broker community, the buyer community, and finally, the bank.
One can visit the open house, inspect every corner of the property with satisfaction, and take a long tour. Visitors can check the facilities and fixtures, take pictures, and get answers to all their questions from the real estate agent in charge. There is a slight pressure to wrap up the tour quickly on a privately scheduled visit but not at an open house.
Choosing a realtor based solely on the fact that they will hold open houses is one of the biggest sellers’ mistakes when choosing a realtor. One of the most important things for a realtor is to make sure that their client’s home is getting a lot of exposure. Home sales prospects are slim without a great deal of exposure and strong marketing. An open house can give extra exposure to the seller’s property.
The essential task of a seller’s realtor is to ensure that their client’s home is getting enough exposure. Open houses can provide additional exposure through promotional advertisements such as newspaper advertisements.
Make sure that an open house is not a magic bullet. Some real estate agents pursue this activity,
hoping that sellers will say yes to hosting them. Often these real estate agents fail when the open house does not sell. In addition, many homeowners expect agents to keep open houses until the home is sold.
The Internet is the fastest way to find a home, but seeing a house in person is key. Very few people will buy a home from just seeing it on the internet. Also, many people don’t obtain an agent until they are ready to buy a house. They enjoy the benefits of attending an open house and then when they are serious, they will reach out to the local agent. The agent they choose could be the one holding the open house they attend.
Open houses can create a convenient set up for the seller, buyer and agent. The seller will gain exposure from the advertising of the open house and the attendance of many buyers in a short period of time. The buyer might feel less pressure of taking their time looking through a home at an open house. Also, they are able to tour many houses without having to set up an appointment. An agent is able to connect with multiple buyers at one time as well as meet buyers who need an agent. It also allows networking between real estate agents.
Reliable Marketing Tool
Open house hosting is one of the best ways to create buzz around your home. It can bring many offers and even start a bidding war if managed professionally. Open house managers use a variety of promotional strategies for property marketing, such as social media posts/advertising, digital marketing, offline networking circles, real estate portals, and other forms of advertising.
Ultimately, this leads to a steady stream of leads and the arrival of walk-ins that you wouldn’t otherwise get with regular property listings. Open houses give you the edge and exposure in a competitive market as they shine light on your property.
Staging Of an Open House
Some staging ideas can help make the property on sale more attractive and welcoming. Here are some of the staging tips used by open house organizers. Well-maintained lawns and gardens, bright flowers, freshly painted walls, tidy and uncluttered rooms, open window treatments and a fresh home scent. Also, to avoid theft it’s important to put valuables in a safe place.
Allow Buyers to Not Feel Pressured
Open houses, in general, are very comfortable events. The vast majority of real estate professionals who host open houses allow buyers to visit the home without pressure. Agents should not pressure anyone into writing up a contract on the spot. They also should allow buyers to walk the property without following their every move.
Related Articles: Homeownership 101 – Things to consider when buying a house
Disadvantages to Holding Open Houses
Low Probability of Sale
It is a fact that only a tiny percentage of homes are sold due to open houses. The main benefit is the real estate agent is put in front of potential customers. An open house also gives the seller the perception their agent is doing a good job by holding an open house. The private view of your home gives you a better chance of finding buyers than open houses. One of the questions real estate agents ask sellers is “ Does an open house work?” Depending on who you talk to, you will get significantly different answers.
Open houses can be unnecessary for a home to sell. Any serious buyer will schedule a showing to see the property of their choice. On the other hand, real estate agents use open houses as business opportunities. It is probably one of the main drives for real estate agents to have open houses. Most people think that an open house is for the sale. The chances of that happening are slim. The benefit comes in the form of the agent’s future business.
Buyers who schedule a showing come because they are very interested in your home. Buyers who come to an open house usually are just “window shopping” and aren’t serious buyers. Most will not have a pre-approved mortgage and the home may not be close to their spending budget.
One of the first steps in buying a home is to get prior approval for a mortgage. There are many reasons why mortgage approval must be obtained when purchasing a home. One of the drawbacks of having open houses is that the ineligible buyer is likely to participate in the open house.
Nosy Neighbors and Lookie Loos
Open houses attract curious neighbors who primarily want to see your home and compare it to their own. Lookie Loos includes people who come to open houses without the intention of buying a home. Passing through the house on a Sunday can be a waste of your time but especially exciting for them for example if it is a high-end home.
Given the tightness of the housing market these days, first impressions are more important than ever. Hosting an open house is just another way to drive a seller crazy and add extra stress.
The advantages and disadvantages of open houses need to be considered before deciding whether an open house is worth it. Open houses can be much more negative than positive, and it’s a real estate myth that they will sell your house quickly. Open houses are “old-fashioned”. Today’s home buyers are astute and do most of their research online and once they narrow things down will make private appointments to view the homes they are most interested in.