Now that we’re in the Spring Market and with the plethora of articles against Open Houses, I wanted to share my thoughts and findings regarding the relevance of the Open House.
Q: What is an Open House?
An Open House is when a property is available to be viewed by the public regardless of their interest in buying (neighbors are welcome), qualifications to buy (no approval letter is needed) or any other prior screening.
Q: How often do homes sell because of the Open House that would not have otherwise sold?
Based on having closed over 700 transactions, many of which had Open Houses, and other research I’ve done, it is clear that it is very, very rare for a home to sell solely due to the Open House. Estimates showing 2% of homes selling due to the Open House seem high.
Q: So what are the benefits of holding the home open?
Benefits to the Seller: The seller can obtain feedback through the listing agent who interacts directly with visitors to the Open House. As a LuxManor Realtor, I ask all Open House visitors what they liked and disliked about a home. Every so often there is something useful to be incorporated into our overall marketing efforts.
Benefits to the Realtor: the agent has a small possibility of selling the home himself to a potential buyer without having to come back to the property several times to service every person who calls (and qualifies) who wants to see the home. Buyers now learn about listings via the internet and their Realtor well before most other sources. A serious buyer without a Realtor can gain access and buy the property through a private appointment with the listing agent.
An Open House may also present an opportunity for the Realtor to meet neighbors who may have their own real estate interests as well as buyers who will eventually buy a different listing.
Q: Why would a seller not want his/her home held open?
Some sellers are private and would prefer not to have neighbors come inside. Others might prefer that all visitors have an appointment with either their own agent or with the listing agent. It is rare that items are stolen from an open house, but the risk level increases when allowing anyone into your home.
Q: What should I do to prepare for an Open House?
The same preparations for putting the home on the market should be done for the Open House. Cleaning, decluttering, depersonalizing, etc should be done before the home is available for any showings. Since the odds are higher that the home will be sold outside of the Open House, there is no reason to make a special effort for an Open House. As with such preparations, I always advise my clients to hide any small items of value. Before an Open House, LuxManor Realtors walk through the property and secure anything the seller may have overlooked.
Q: How do I know that the buyers with an agent are more qualified than buyers coming to the Open House?
You don’t. Many Realtors will rush out to show a property without even screening the potential buyer but at least the agent usually has a way to contact the buyer if need be (phone number, email address, etc). With an Open House, someone could walk in off the street, give a fake name and be out the door again. With an agent showing, the agent’s access is recorded in the lockbox and if there is an issue, there is a trail.
Q: When is it in the seller’s best interest to hold a property Open?
While the home may not sell because of the open house, there are certain markets (like 2003-2005) where the final sales price will be higher because of the Open House. In those years (hot seller’s market), many Realtors were literally too busy to show every client the listing before the listing went under contract. The more offers, the higher the sales price was likely to be. This does not work in a buyer’s market when the buyer sees the home and comes back Saturday or Sunday to a slow open house and then wants to haggle.
Q: Which is better, a Saturday or a Sunday Open House?
Before doing research, I would have bet it was Sunday. Surprisingly, the empirical evidence has shown that Saturday Open Houses can get just as much traffic as Sunday Open Houses.
Q: So what is the bottom line?
There is nothing wrong with holding a home open every so often (especially soon after the home comes on the market) and is common practice for many listings at LuxManor Real Estate. However, it is not likely to result in a sale. Hide your valuables and understand that this is far from the most important part of the marketing.
Adding an Open House to the marketing falls well below the following: quality and quantity of photos, complete and accurate listing in the MLS, beautiful fact sheets, information about the neighborhood, a proactive/responsive Realtor, feedback from actual buyers through their agents, staging/repairs and, of course, proper pricing of the home.