An open house is a great way to get acquainted with buyers, other realtors, and interact with the neighborhood in a pressure-free and fun environment! However, they can be time-consuming, expensive, and might not be as effective as one would hope to sell a home. As you are probably starting to realize, this is a long-debated topic discussed by realtors around the country. While some would say that hosting an open house is vital to selling a home, some realtors argue that they are ineffective. The truth is, is that there are plenty of both negative and positive aspects to hosting an open house.
If you’re thinking about having one, you might want to shift your expectations from “I will sell my home at this open house” to “I will get feedback on how to improve my home to make a sale in the future.” Because, historically, open houses do not sell homes. In fact, only 2% of homes sell at an open house. So, you probably won’t be signing a contract at one, but you certainly will learn a lot about what the potential buyers would like to see improved to make a deal.
To us at The Reynolds Team, this feedback is some of the most essential information a seller can get! In this blog, we are going to highlight both sides of the debate and perhaps convince you to host an open house for reasons other than selling your home at one.
We’ll start by mentioning the positives:
1. Ability to show the house to multiple buyers at one time. If there are a lot of people interested in your home, numerous private showings might become stressful and not possible with your schedule–especially if you are still living in the house. Having an open house is a great way to get everyone under the roof at once.
2. Attracts buyers who may not know how to start the home-buying process. Buying a home is not necessarily something a majority of us are well acquainted with. New homebuyers especially need guidance, tips, and advice throughout the process. Sometimes new buyers who are just starting their search might see a sign on the road for an open house and stop in as their first attempt at house hunting. Here they will meet the real estate agents and possibly become their client! The agents win, and the more buyers that are in the market, the better it is for the seller, too.
3. Exposure. Your listing can never have too much exposure! The more eyes on your home, the more likely it is that you will get multiple offers. Newspaper ads, street signs, and internet ads will bring traffic to the listing. Even people who come to the open house that are not qualified to purchase it is beneficial. These folks might spread the word of the listing to their friends and family, which could generate a lead for someone who may be more qualified. Agents benefit here too because they will be introduced to potential clients that might require representation.
4. Pressure-free environment. Open houses are laid back by nature. Buyers have the chance to take their time and walk through the home without the pressure of a seller watching over them with a fixed time constraint. Buyers might feel more comfortable and at home with a relaxed event versus a private showing, which can sometimes put pressure on the buyers as they are the sole focus during the walk-through.
5. Real feedback. Agents are going to be face-to-face with a host of potential buyers. Here, agents can ask questions about what the guests like and don’t like about the residence. Based on the feedback, they can suggest modifications that the sellers can do to make their listing more attractive. Some suggestions, for example, could be things like doing a fresh coat of paint, repairing the cracks in the walkway, or fixing creaky doors.
1. Slim chance of a sale. As we mentioned before, only 2% of homes actually sell at an open house. That’s why we suggest that if you host one, that you remove this expectation and focus on the list of other pros that will undoubtedly benefit you.
2. Unqualified buyers & “lookie-loos.”: It’s not a secret that some of the people coming to an open house are unqualified. One of the first steps of buying a home is obtaining a mortgage pre-approval, and some of the guests visiting an open house might not have yet made this step. So, there’s no way to know if the guest can actually afford to buy the house. So, what is lookie-loo, you ask? It might seem silly, but a lookie-loo is someone who has zero intention of actually buying a home. It happens quite often, and they are most commonly just nosy neighbors or people who have nothing better to do!
For a final thought, we wanted to highlight a 2019 study that shows that homes that host open houses sell for $9,000 more on average, and spend about a week less on the market. However, no connection has been made between the open house and the actual sale. So, there might still be something even more beneficial to having an open house than we think! Regardless, open houses are effective for sellers because it helps them see how much general interest exists in their local real estate market. It is also a great way to spread the word about the listing and get crucial feedback from potential buyers so the sellers can make the appropriate improvements. It’s important to remember that an open house’s purpose isn’t to necessarily sign a contract right then and there, but to instead to provide a strong foundation for getting a home sold.
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