It’s a mainstay of any real estate transaction: the open house. During the peak spring and summer season, you’re bound to see plenty of open house signs throughout your neighborhood, Facebook posts by local agents, and even ads taken out in your local paper. Open houses are a highly debated topic both by homeowners and real estate agents. But what are the pros and cons of hosting an open house?
Not all sellers are the same! Some believe that open houses are the only way to sell a home while others believe that an open house is just not going to make the sale. The same arguments are made by real estate agents. Some swear that hosting open houses regularly is a critical step to finding your ideal buyer while other agents will never hold an open house, citing that statistics show that it is rare to gain a buyer through holding an open house.
So if you’re selling a home, should you host an open house? There are some pros and cons to hosting an open house and we’re going to dive into this topic today!
Pros to Holding an Open House
Purchasing a home is a process that not many are familiar with, especially first time home buyers. They usually need a significant amount of guidance, tips, and advice throughout the home buying process. An argument for hosting an open house is the possibility that a home buyer searching for their first (or next) home will attend. A home buyer may see the sign on the corner of your street, decide to take a look, and fall in love with your home. This is definitely a positive of hosting an open house!
Open houses can also give additional exposure to a seller’s home. Whether it’s street signs, newspaper ads, or paid Internet ads that are promoting the open house, the efforts will certainly lead to additional exposure.
Allows Buyers to Look Without Feeling Pressured
Generally, open houses are very laid back events. The majority of real estate agents who host open houses will allow buyers to tour the home with little to no pressure. Open houses typically give buyers the option to view a home without the pressure from an agent or seller. Some buyers like to envision their new life in the home, analyze in detail, and decide if they like the neighborhood where the home is located.
Cons to Holding an Open House
Slim Chance of a Sale
When discussing hosting an open house, the main question you should ask is, “is this open house necessary to sell a home?” The answer is absolutely not! The percentage of homes that actually sell as a result of an open house is less than 3%. Homes are typically sold when an agent is privately showing the home to qualified buyers. The crowd that attends your open house is likely not going to be a crowd of qualified buyers who will ultimately make offers.
The first step in any home buying process is obtaining a mortgage pre-approval. It’s important to obtain the pre-approval for many reasons when buying a home. One drawback to having open houses is the probability of unqualified buyers attending. Would you want people walking through your home that cannot afford to buy it? Of course not! It’s next to impossible to screen potential open house attendees to ensure that they are qualified to purchase your home.
Another negative to hosting an open house is the likelihood you’ll attract the dreaded ‘nosy neighbors’ and ‘lookie-loos’. These are people who love to stop at a neighbor’s open house to see how the home compares to their own. In addition to seeing how their neighbors live, they love to see how the house is decorated, upgrades that have been added, and any additional details that they may not have in their own home.
If you decide to host an open house, make sure that you remove all valuables during the event. The possibility of theft during an open house does exist! When planning for your open house, make sure to discuss with your agent their procedure for open houses to ensure that your home and valuables are kept safe.
There’s quite a bit to discuss when thinking of hosting an open house. Today’s buyers are more savvy and do most of their research online before visiting a home or event contacting an agent. In order to properly find your ideal buyer, know that your agent is doing everything to find that ideal buyer such as understanding SEO, having a strong social media presence, and networking with other local agents to connect and find the ideal buyer.