The Pros And Cons Of Open Houses In Real Estate
Open houses in real estate are a highly debated topic both by home owners and also real estate professionals. In fact, this article is sure to spark some debate between home owners and also real estate professionals.
The truth is that some seller’s will insist that having open houses are something that will sell their homes, others will want nothing to do with open houses, and some seller’s will be on the fence. The same can be said about some real estate professionals. Some will swear that open houses are a critical event to have, other Realtors will never hold open houses, and others will periodically have open houses.
So, if you’re selling a home, should you have open houses? Almost any decision that has to be made will have it’s positive outcomes but also it’s negative outcomes, and this is no different when it comes to open houses in real estate. Ultimately, if you’re selling a home and you’re unsure whether you want to have open houses, you need to be aware of the possible positives from having an open house but also need to be aware of the possible negative results from an open house.
Below are the pros and cons of open houses in real estate. Having a strong understanding of these pros and cons can make it much easier to decide if open houses are something you should participate in or not.
Pros To Holding Open Houses
Attract Buyers Who May Not Know How To Start The Home Buying Process
Buying a home is not a process that most are familiar with, especially first time home buyer’s. Home buyer’s often need a significant amount of guidance, tips, and advice throughout the home buying process. Some buyer’s don’t even know whether they should contact a Realtor or a bank first when buying a home.
A potential positive to deciding to hold open houses is the possibility of a home buyer who does not know how to start the home buying process will attend. A home buyer who may see a sign on the corner of a street when driving may potentially stop and get more information from the hosting Realtor on the home buying process. More buyer’s in the market is a positive for any seller, of course, if they are qualified buyer’s.
Additional Exposure
Choosing a Realtor based solely on the fact they will hold open houses every week is one of the biggest mistakes seller’s make when choosing a Realtor. One of the most important things for a Realtor selling a home is making sure their clients home is getting a ton of exposure. Without maximum exposure and a strong marketing system, the chances of a home selling are greatly reduced.
Open houses can give additional exposure to a seller’s home. Whether it’s street signs, newspaper ads, or internet ads that are promoting the open house, having an open house can lead to additional exposure.
Allows Buyers To Not Feel Pressured
Open houses, in general, are very laid back events. The majority of real estate professionals who host open houses will allow buyer’s to tour the home with little to no pressure. Obviously there are some Realtors who feel they should be hard selling their seller’s home, but unfortunately this usually just makes them look like a fool.
Open houses normally give buyer’s the option to view a home without the pressure of a Realtor or seller. Some buyer’s like to analyze a home in detail without having a time constraint or pressure. This can allow a buyer to identify whether they like a home and also look at the items that they should be looking at when viewing homes.
Allows Realtors To Pick Up New Buyer’s
How is a Realtor picking up new buyers a positive for a home seller? It’s not! Unfortunately, many real estate agents fail to mention this to a seller as a pro of open houses because it does not benefit them.
Many potential buyer’s who visit open houses have yet to establish a relationship with a Realtor. This gives the hosting Realtor the opportunity to convert this buyer into one of their buyer’s. If you’re a home owner thinking of selling, it’s important you understand that a Realtor may host an open house with the intention of not selling your home, but to pick up additional buyer’s.
Cons To Holding Open Houses
Slim Chance Of A Sale
Are open houses 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 2-3%.
How do homes get sold then if they are not being sold at open houses? When selling a home, you want there to be private showings. The majority of homes are sold when a buyer has a Realtor, requests an appointment, and tours your home privately. The crowd that an open house attracts is more than likely not going to be the crowd that is going to purchase the home.
Unqualified Buyers
One of the first steps in the home buying process is obtaining a mortgage pre-approval. It’s important to obtain a mortgage pre-approval for many reasonswhen buying a home. One drawback to having open houses is the possibility of unqualified buyer’s attending the open house.
Would you want people walking through your home that cannot afford to buy it? Of course not! It’s next to impossible to screen open house attendees to ensure they are qualified to purchase the home.
Nosy Neighbors & “Lookie-Loos”
Another negative to holding open houses is the fact that they do an excellent job attracting nosy neighbors and “lookie-loos.” Nosy neighbors love to stop at an open house to see how their neighbors home compares to their own. In addition to seeing how their home compares, neighbors like to stop at their neighbors open houses to see how the house is decorated.
What are “lookie-loos?” A “lookie-loo” is a person who stops at open houses with absolutely no intention of buying a home. Sounds pretty silly, right? It happens quite often and the fact is, these people are never going to buy the home and are looking because they don’t have anything better to do.
Security Issues
Break-ins and vandalizing are two things that are a reality. The chances of this happening increase when selling a home, especially if you’re selling a vacant home. Open houses allow criminals the opportunity to explore a home with little to no supervision and can give them the opportunity to plan out their crime.
Whether the crime was a direct result from one of the open house attendees is unknown, however, there are stories developing across the United States of people “casing” homes during open houses. Before deciding whether to have an open house or not, you need to consider the security issues.
Possible Theft
If you decide to hold an open house, make sure you remove all valuable items before the open house event. The possibility for theft during an open house does exist. There are criminals out there who will steal not only valuable jewelry and electronics, but also will steal prescription drugs and other items.
If you decide to hold open houses, make sure you discuss with your Realtor their procedures on open houses. Do they take any additional precautionary steps? The most important thing is to understand that theft can happen and no Realtor will take the responsibility for missing items from an open house.
Final Thoughts
The pros and cons of open houses need to be carefully considered before deciding whether open houses are worth it or not. Personally, I believe open houses have many more negatives than positives and are merely just a common real estate myth. Open houses are “old fashioned” and today’s home buyer’s are very savvy and do most of their research online, before visiting a home.
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P.C. har.com