Saturday, 21 October 2017

Pros and Cons of a Real Estate Open House

Written by Posted On Tuesday, 19 September 2017 14:11
What Are The Pros and Cons of an Open House What Are The Pros and Cons of an Open House

What to Know About Open Houses

Hosting an open house when selling a home is a tried-and-true real estate approach. Open houses have been a tradition for as long as I can remember. Their viability as a marketing tool, however, has changed since the advent of the internet.

Open houses can be a real hassle for the homeowner. Although an open house will undoubtedly get people in the home, a homeowner should consider if it is really necessary and who exactly is coming through the door!

If a real estate agent is honest with their client, they will advise against holding an open house. This may turn out to be a complicated decision given the fact that open houses generate leads for a real estate agent. An exceptional real estate agent will explain the pros and cons of an open house to their client. Unfortunately, some agents are more concerned about their own personal gain than your home and it's contents.

Yes, open houses do have drawbacks. The downsides may be in fact something you have never considered before doing a little research.

Therefore, the question lingers, if you are putting up your house for sale, should you have an open house? Below is a list of pros and cons to help you make a choice:

Cons For an Open House

Low Probability of Sale

Truthfully, a very small percentage of homes sell as a result of open houses. In this case, the real estate agent benefits the most by being exposed to potential clients. Private viewings of your home have better chances of earning you a buyer than open houses. One of the questions that real estate agents get asked all the time from seller is do open houses work. Depending on who you talk to you'll get significantly different answers.

When someone asks me this question I will always back with a question of my own which is work for who. Open houses are completely unnecessary for a home to sell. Any serious buyer will schedule a showing to view a property they like.

Real Estate agents on the other hand use open houses as an opportunity to prospect for business. The likelihood of picking up a buyer or seller is the reason why real estate agents hold open houses. Most people think the open house is done to sell the home. The odds of that happening are slim. The benefit comes in the form of future business for the agent.

With scheduled showings you have financially vetted buyers coming through your home. With an open house you have anyone who feels like coming in. In fact most of the people coming through the door will not be pre-approved for a mortgage. Your house might not be anywhere close their spending budget!

Security Concerns

Break-ins and vandalism are two things that are most likely to happen after an open house and which are an unfortunate reality. Their chances of occurrence increases if you are selling a vacant home. Open houses grant criminals the opportunity to explore a home with little to no supervision, giving them time to plan their crime.

Believe it or not most of the theft that takes place is during the open house. When there are multiple parties in a home at the same time, it is impossible for a real estate agent to watch everyone. It's very easy for a criminal to come in and take something of value. It's nearly impossible when this happens for the person to be caught.

It's no wonder that people have a surprised look on their face when they become educated on the downsides of a open house. Most real estate agents are not going to do it.

Nosy Neighbors and Lookie Loos

Open houses are known to attract inquisitive neighbors who basically want to see your house and compare it to their own. Lookie loos include individuals who visit open houses with no intention of purchasing the home. They just look! Coming through a home can kill some time on a Sunday and can be especially appealing if it's a high end home.

Excessive Stress

Considering the housing market being so tight these days, first impressions are more critical than ever. Hosting an open house is just one more thing to drive a seller crazy. Nevertheless, holding the same open house repeatedly can send out the wrong message, such as there’s something wrong with the house.

Pros For an Open House

Open To All

Open houses accommodate more than just prospective buyers. Brokers who might want to team up on the sale and offer advice on ways to assist a home sell faster, also come. It is important to remember that there are three people you sell a house to. First is the broker community, second is the buyer community and finally the bank. Unless you can sell to all three parties, you are never going to succeed in selling that house.

Additional Exposure

One of the most essential tasks of a Realtor acting on behalf of a homeowner, is ensuring their client’s home is getting enough exposure. Open houses can give extra exposure through promotional advertising like newspaper ads, internet ads and street signs.

Just make sure you understand that an open house is not a magic bullet. Some real estate agents pump up this activity in hopes the seller will say yes to them hosting one. Quite often this sets the real estate agent up for failure when the open house doesn't bring a sale. Additionally, lots of owners will expect agents to continue to do open houses until the home sells.

Actual Browsing

The internet may be the fastest way to find a home, but nothing overcomes walking through a house and seeing it first-hand. Besides, a considerable number of people don’t make appointments until they are really ready to buy a home. They enjoy the benefit of just attending an open house.

If they happen to become serious they can always reach out to a local agent.

Convenience

Open houses are often a place where a potential buyer can drop in from the street. Buying a home is a process that may appear strange to many people. Open houses encourage just about anyone who doesn’t know about buying a home into acquiring one.

The planned open house on a weekend can also be convenient at times for sellers. They can block off a few hours in the day and ask anyone interested to come at that time.

Final Thoughts

When thinking about having an open house you really need to weigh the advantages against the disadvantages. Keep in mind that a good real estate agent should sell your home regardless of whether you host one or not. Could you get lucky and sell your home as a direct result of an open house - sure. Would I plan on it - absolutely not!

There are lots of real estate agents that hate the fact I write about the pros and cons of open houses. Many in the industry would love for me not to share why open houses aren't necessary to sell a home. They would love that I don't share they can be a magnet for crime. Sorry that is not the way I roll.

We are in the digital age where countless houses are sold every day where the owners have chosen not to have strangers inside. The choice is yours!

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