One question we’re often asked during a listing interview is “Will you do open houses to help sell our home?”
This is a great example of knowing the right questions to ask. Instead, the better question is “Do open houses help us reach our goals and if so, will you be holding open houses?”
Open House Insight: Q&A
In the case of a strong Seller’s market, isn’t it a good idea to hold an open house at least on the first weekend to be sure interested Buyers have the opportunity to view the home?
If you are only going to let your home be on the market for 3 days or less prior to reviewing offers, you should have an open house to try to ensure your largest audience has had a chance to see the home. However, this is not good strategy. While this is rarely the case in Austin’s current, more stabilized market, in a very strong Seller’s market with immediate multiple offers, we recommend that our Sellers wait a minimum of 5-7 days to review offers. This ensures that all syndication websites have pulled in the new listing, new buyers have had the opportunity to hire and set up an appointment with their agent, and has given enough time to put together a well thought-out offer. This strategy ensures the largest audience possible has been able to view the home in-person, and reduces the risk of buyer’s cancelling the contract because they were “rushed into making an offer”. Simple timeframe adjustments like this result in max profit to a Seller.
Wouldn’t an open house create “buzz” about my new listing, and therefore, create Buyer urgency to put together a great offer?
We are no longer in the days of every home receiving multiple offers when this was indeed, a good tactic. Today, Buyers tend to take their time when reviewing all of their home options and do not feel the same sense of urgency they once did.
Open houses inherently pose significant safety and security risks to both the hosting agent and the home.
Open houses let anyone in; whether they’re Buyers or not.
An agent is advertising online, for the entire world wide web audience to see, a picture of themselves, the contents of the home, possibly the floor plan, and the timeframe the agent will be there (with the door open) for anyone to come in. Let that soak in for a second.
Aside from agent safety, this is a great opportunity for a criminal to scope out the home, windows, locks, and security devices, valuables to be stolen, or an addict to snag some medication from the bathroom.
This is not a “this only happens in other places or ‘bad’ neighborhoods” issue. Attacks on REALTORS® have happened during open houses in Austin (even in ‘great’ neighborhoods), homes have been scoped and then looted, gaming systems and other valuables stolen, and REALTORS® have been lured to properties.
What’s the real benefit of hosting an open house?
Three reasons some agents are gung-ho on holding open houses are the following:
1. The agent holding the open house gets a lot of buyer leads which they hope to convert into future buyers…probably of a different home.
2. The agent might pick up an unrepresented buyer to purchase the listing, which may increase their paycheck. It should be noted that unrepresented buyers can significantly increase legal liability for both the Seller and their Broker. Represented buyers are a benefit to Sellers.
3. It’s a great advertisement to your neighbors – maybe they’ll call the same agent to list their home someday.
In summary, Sellers should have a thoughtful and transparent conversation with their REALTOR® to decide together if an open house will truly be beneficial to the home sale. If it is, do it! If it isn’t, let those marketing hours and dollars be spent on another activity that will better ensure that the Seller’s profit is maximized.