Home sellers swear by them, while real estate agents have a love-hate relationship with them. Open houses, those typically-on-Sunday-afternoon soirees, wherein a seller leaves his home in the hands of his real estate agent who holds it wide open for the world to traipse through, have created an ongoing debate.
So, do open houses sell homes or are they a waste of time? Let’s take a look at some of the pros and cons.
Advantages to holding an open house
Over 90 percent of folks in the market to buy a home say they plan to attend open houses as a part of the purchasing process, according to a survey conducted for Trulia.com. A similar study, performed for the National Association of Realtors, states that only 45 percent of potential buyers plan to use open houses in their home search.
Whichever number is closest to reality, they both represent a significant amount of exposure for a home on the market. The more eyes that see a house for sale, the better the chances that it sells quickly.
Open houses, then, bring potential buyers to doors. What happens once they enter the door, whether they become among the 1 to 2 percent of buyers who actually purchase an open-house home, depends on several factors:
- Price. Proper pricing of the home has a major effect on how quickly it sells and if it will sell to a buyer attending the open house.
- The house. Even multiple open houses and a massive marketing campaign won’t sell a shabby house, especially if it’s overpriced.
- Your agent. Your real estate’s experience weighs heavily on the outcome of the open house as well. Converting the looky-loo into a buyer takes a pro.
And, the disadvantages
“Today’s buyers want to see homes on their own schedule,” Kevin Kudrna, real estate broker in Colorado Springs, Colorado tells Teresa Mears of usnews.com. And that’s well and good, as long as the market favors buyers.
Sellers’ markets, however, are a whole different breed. With a homeowner in the driver’s seat, buyers don’t have the luxury of looking at “homes on their own schedule.” Not if they want to be among the first to view a home. In this type of market, open houses are the ideal way to expose a home to the masses but they put buyers at a disadvantage.
Remember that 1 to 2 percent figure we mentioned above? The chances are so small that an open-house attendee will actually put an offer in on a home, many real estate agents discourage the practice.
Consider why: the agent needs to clear his schedule for several hours on a weekend (our busiest time), sit in someone else’s home as folks trickle in, knowing all the while that none of them are likely to actually purchase the home. So, for many agents, open houses are a waste of time.
Many others, however, view them as a way to reel in new clients. So, again, there are advantages and disadvantages to most things.
The open house is a way to bring attention to a home, which is important when buyers have lots of homes from which to choose. In sellers’ markets, such as the one we’re in now, when homes often sell before they’re even listed in the MLS, there may not even be time to hold the home open and, if there is, it still may be a waste of time.
In buyers’ markets, however, when buyers have plenty of inventory to see, I believe open houses are a must.