Open House Myths And What You Really Need To Know
Most buyers think that open houses exist so that they can tour homes. Most sellers think that open houses are essential marketing tools to sell their home. In reality, neither belief is true – open houses exist to serve the agent. In this article, we discuss why you don’t need to hold an open house to sell your home, why you don’t need to visit one to buy a home (and what you should know if you go to one), and why agents like to hold them anyway.
An open house will typically attract three different types of visitors: (1) Serious buyers who are interested in purchasing a home; (2) Buyers who are in the beginning stages of their search and are touring properties to get a sense of what is on the market, but aren’t ready to make an offer yet; and (3) Neighbors and passersby who saw the open house signs and decided to walk in out of curiosity. In a worst case scenario, an open house will attract a fourth category of persons who will visit the home with the intent to vandalize or steal. From the seller’s perspective, buyers who fall into category (1) are the only people who need to see their home.
A serious buyer who falls into category (1) will typically first identify a home in which he or she is interested online. For this reason, well-done photographs, videos, layouts, and other online marketing tools are critical aspects of the marketing package for a property. Assuming an open house is not scheduled, a serious buyer will then independently arrange for a showing, either through his/her agent or through the listing agent. In other words, whether there is an open house scheduled or not, a serious buyer will find a way to visit the home.
So why go through the trouble of holding an open house? The reason many agents push for an open house is because they are interested in attracting buyers in categories (2) and (3), who they can attempt to turn into clients of their own when those buyers later decide to purchase a different home. In other words, the agent hosting the open house is often primarily interested in finding new buyer clients for different homes, not necessarily selling the home that is having an open house. This is the primary reason why when buyers walk into an open house they are typically greeted with: “Thanks for visiting, please fill out the sign-in sheet”. It’s not that the seller has asked the agent to use a sign-in sheet. It’s the agent’s way of asking the buyer to provide his or her contact information so that the agent can contact the buyer at a later date to discuss the buyer’s general home search, in an attempt to convert the buyer into a client for the purchase of a different home. Many of those sheets will even include a small-print disclaimer providing that by filling in the information, you are agreeing to be contacted for marketing purposes at a later date. The agent will often follow the introduction with some friendly conversation, while attempting to determine if the buyer is already represented by an agent. The conversation will often get cut short when the buyer discloses that he or she is already represented by an agent.
So, if you are selling your home, ask yourself – do you really need to hold an open house? Perhaps you would like to make sure all the category (1) buyers have an opportunity to see the home during a specific window, thereby avoiding accommodating numerous inconvenient requests to see your home at different times but those buyers. That is an entirely rational reason to hold an open house. However, if you are holding one because you think it is necessary in order to sell your home, think again. Do you really need to hold an open house, and who really benefits if you do? And if you are a potential buyer walking into one, be aware that often-times much of the initial conversation with the hosting agent is a sales pitch for the agent, not the house.
There are of course exceptions to these general rules. Sometimes the agent holding the open house is truly interested in selling the home. We don’t recommend that our buyers attend open houses with a defensive mindset, but they should certainly be aware of the potential that the agent’s motivation is something other than to sell the home. Also, as noted above, sometimes it is more convenient for the seller to hold an open house as opposed to scheduling numerous appointments. However, all buyers and sellers should be fully informed of the true purpose of an open house so that they can make informed decisions about whether to hold/visit one.
For more information on how Esquire Real Estate Brokerage, Inc. can help you in the Los Angeles real estate market, feel free to give us a call at 213-973-9439 or send us an email at email@example.com.