The Advantages and Disadvantages of Hosting an Open House

In real estate, an open house is an event dedicated to allowing potential buyers to view a house or property which is up for sale. It is usually handled by an agent, broker, or realtor. There are rare cases where clients go to open houses without their agent or broker.

Are open houses a good idea though? Open houses are meant to allow clients and buyers to look at the property in order to help them decide. While a vast majority of agents and brokers favor the idea of holding open houses, others strongly advise against it. Having an open house has both positive and negative sides which clients must be aware of. Let's take a look at the benefits and drawbacks of open houses.

Advantages of Open Houses

Apart from the common notion that holding open houses is an essential aspect of selling a home, there are other advantages to opening the doors of a property to prospects, potential clients, and the general public.

It attracts buyers who don't know where to begin the home buying process

Most people, especially first-time buyers, are unfamiliar with the process of purchasing a home or a property. Throughout the home buying process, home buyers need a significant amount of information, recommendations, and advice. When it comes to buying a property, some buyers are unsure whether they should go to a realtor or a bank first.

One potential benefit of holding open houses is that it may attract a home buyer who is uncertain on where to start the process of purchasing a home. When a buyer sees a sign on the corner of the street while walking or driving, they may decide to pull over and speak with the agent in charge about the home purchasing process. More buyers in the market will always be a good thing for any seller, as long as the buyers are qualified.

It serves as proof that you're doing your job

Oftentimes, sellers don't have the time to market and sell their house or property. Most of these people either work regular jobs or attend to other business matters. Hiring an agent eases them of the burden of not being able to properly advertise their listing.

Open houses might be seen by sellers as proof that you're doing everything you can as an agent to promote their house or property. Even if an open house isn't successful, sellers will appreciate their agent's efforts.

It increases exposure for the home or property

One of the most common mistakes sellers make when selecting an agent is choosing one based entirely on the fact that they would have open houses every week. One of the most critical things an agent can do when selling a home is ensure that their client's property receives a huge amount of exposure. The prospects of a home being sold are considerably lowered without maximum exposure and a robust marketing approach.

Open houses can help a seller's home or property receive more exposure. Having an open house can result in increased advertising, whether it's through street signs, newspaper ads, or internet advertisements. It can also serve as a kick-0ff event, allowing the property to be advertised and introduced to a pool of potential clients.

It allows buyers to shop without feeling rushed

In general, open houses are low-key affairs. The majority of real estate professionals who arrange open houses would let buyers view the house without feeling rushed. Obviously, some agents believe they should be aggressive in marketing and selling their client's home, but this usually makes them look like a fool.

Open houses allow buyers to view a home without being rushed by an agent or a seller. Some buyers want to see a home in depth without being placed under pressure. This can help a buyer choose whether or not they like a home, and also allow them to focus on the items that they should be looking at when seeing properties.

It allows agents to meet new potential clients

Many potential buyers who attend open houses have not yet established contact with an agent. This provides an opportunity for the hosting agent to convert potential clients into one of their own.

It is extremely essential for a seller to understand that an agent may organize an open house with the goal of attracting new buyers both for the house and for other listings and properties the agent may have.

Disadvantages of Open Homes

While hosting an open house has advantages, it also has drawbacks that many agents and sellers are unaware of or fail to consider.

There's a slim chance of a sale

Is it required to hold open houses in order to sell a house or property? Not exactly. The percentage of homes that sell as a result of an open house is an underwhelming 2% - 3%

If homes aren't being sold at open houses, how do they get sold? When it comes to selling a home, you want private showings. When a buyer has an agent, schedules an appointment, and views properties privately, the house is likely to be sold. The people that come to an open house is unlikely to be the same as the people that will actually buy the house.

There will be buyers that aren't qualified

Obtaining a mortgage pre-approval is one of the first steps in the home-buying process and is critical when purchasing a property for a variety of reasons. One disadvantage of having open houses is the chance of attracting unqualified buyers.

Would you want someone who can't afford to buy your listings be able to walk through it? Sadly, screening open house attendees to guarantee that they are qualified to purchase the home is nearly impossible.

It is time consuming

Open houses can take up a lot of time for both you and the sellers. As an agent, you'll be in charge of marketing the open house, inviting visitors, staying for the duration of the event, and following up with possible buyers. This could potentially detract you from other clients and deals.

Sellers, on the other hand, frequently devote a significant amount of time and effort to getting their home in tip-top shape for potential clients, and the leave during the open house.

Nosy neighbors

Another disadvantage of conducting open homes is that they draw the attention of nosy neighbors and "lookie-loos." A "lookie-loo" is someone who attends open houses with no intention of purchasing a home. It may sound ridiculous, but the truth is that these folks will never buy a property and are only looking because they have nothing else to do.

Neighbors who are nosy like to go to open houses to see how their neighbors' houses compare to their own. They also tend to view how the house is adorned and designed in addition to evaluating how their own home compares.

Security concerns

Break-ins and vandalism are both common occurrences. When selling a home, the possibilities of these happening increase, especially if you're selling a vacant home. Open houses provide criminals with the opportunity to investigate a home with little to no monitoring, allowing them to plan out their crime.

A common example of this is people "casing" homes at open houses around the US. Consider the security implications before determining whether or not to hold an open house.

Possibility of theft

If you decide to conduct an open house, make sure to inform your seller to keep all valuable and important belongings before opening the doors to the public. There are thieves out there who will steal whatever they can. These can include prescription medications, precious jewels, and technology.

If you decide to hold open homes, make sure to lay out open house policies. The most essential aspect of opening a seller's home to the public is to remember that theft can occur, and if it does, you will have to take responsibility.

To conclude, the concept of open houses seems to be a hotbed of debate and argument. Some like the idea, others do not. However, it is essential to consider that holding open houses fully depends on the circumstances of each and every seller.

These are just a few of the considerations to think about when determining whether or not to suggest the idea of conducting an open house to your client.