One question we’re often asked during a listing interview is “Will you do open houses to help sell our home?”
This is a great example of knowing the right questions to ask. Instead, the better question is “Do open houses help sell my home for top dollar and if so, will you be holding open houses?
Open House insight:
Since the market is so fast, isn’t it a good idea to hold an open house at least on the first weekend to be sure everyone who wants to see it can get in?
If you are only going to let your home be on the market for 3 days or less prior to reviewing offers, you should have an open house to try to ensure your largest audience has had a chance to see the home. However, this is not good strategy. We recommend that our Sellers wait 5-7 days to review offers. This ensures that all syndication websites have pulled in the new listing, new buyers have had the opportunity to hire and set up an appointment with their agent, and has given enough time to put together a well thought out offer. This strategy ensures the largest audience possible has been able to view the home, and reduces the risk of buyer’s cancelling the contract because they were “rushed into making an offer without thinking about it”. Simple timeframe adjustments like this one, result in max profit to a Seller.
Wouldn’t the sheer volume of people going in and out of the house during an open house create more buzz, and therefore, more buyer urgency to put together a great offer?
Back in the day, before every house was receiving multiple offers (I can barely remember those days), this was a great sales tactic. Today, all serious and prepared buyers fully understand the nature of Austin’s hot market, and assume that they will be competing in a multiple offer environment whether they’ve seen other buyers going in and out of the house or not. I have seen the extreme “busy-ness” created by an open house actually turn buyers away from submitting an offer.
“There were so many people at that open house, God only knows how many are paying cash, we’re just going to pass.”
Buyer fatigue is a real thing. If a buyer has been competing and losing over and over, this is a scenario where they might decide not even try to compete. Those buyers very well could have been a Seller’s best offer, if only they had submitted.
Open houses inherently pose significant safety and security issues to both the agent, and the home.
Open houses let anyone in; whether they’re buyers or not.
An agent is advertising online, for the entire world wide web audience to see, a picture of themselves, all contents of the home, possibly the floor plan, and the timeframe the agent will be there (with the door open) for anyone to come in. Let that soak in for a second.
Aside from agent safety, this is a great opportunity for a criminal to scope out the home, windows, locks, and security devices, or an addict to snag some medication from the bathroom.
This is not a “this only happens in other places or ‘bad’ neighborhoods” issue. Attacks on REALTORS® have happened during open houses in Austin (even in ‘great’ neighborhoods), homes have been scoped and then looted, and REALTORS® have been lured to properties.
What’s the real benefit of hosting an open house?
Three reasons some agents are gung-ho on holding open houses are the following:
1. The agent holding the open house gets a lot of buyer leads which they hope to convert into future buyers…probably of a different home.
2. The agent might pick up an unrepresented buyer there for the listing, which likely doubles their paycheck.
3. It’s a great advertisement to your neighbors – maybe they’ll call the same agent to list their home someday.
In summary, Sellers should have a thoughtful and transparent conversation with their REALTOR® to decide together if an open house will truly be beneficial to the home sale. If it is, do it! If it isn’t, let those marketing hours and dollars be spent on another activity that will better ensure that the Seller’s profit is maximized.