An open house is an essential aspect of any property investment — and for obvious reasons.
Real estate is an excellent example of a relatively illiquid market with dissimilar products. That means individual houses are often different from each other — even if they’re on the same block.
As such, potential buyers need to walk through the property at leisure to get an idea of what they’re buying. And that’s what an open house offers.
What is an Open House?
An open house describes a scheduled time when potential buyers can view a residential property that’s available for sale. Usually, the property owner or renter vacates the house when a realtor holds an open house.
The goal here is simple — secure buyers’ interest.
Open houses allow prospects to comfortably look at a house and its surrounding. During this period, the broker cleans and organizes the residential property to attract potential buyers.
Sometimes, the realtor can offer refreshments such as cocktails, coffee, or hors d’oeuvres. Yes, it sounds like a fun event for all the parties involved.
Be that as it may, open houses are far from perfect. Here are some benefits and downsides of hosting an open house event.
Four Benefits of Hosting an Open House Event
Here are four reasons why it’s a good idea to host open house events.
1. Attract Uninformed Buyers
Several potential home buyers have no idea of how the home buying process works.
For those individuals, open houses play a significant role to get proper guidance and tips. Besides meeting different realtors, open houses also enable prospects to get appropriate information.
2. Additional Exposure
The primary goal of realtors is to boost the property’s exposure. Without maximum exposure and a good marketing system, it is very difficult to increase the chances of selling a house.
Admittedly, we’re in the digital age where everything is now virtual. However, walk-in visits of houses still have their charm. Most people join open houses for knowledge, tips, and tricks before buying or even planning to buy a house.
So, open houses provide a lot of exposure in this way.
3. Make Buyers Comfortable
Most of the realtors, when they come up with clients, try to make them feel less pressured.
Even most of the sellers allow the buyers to visit the whole house without any pressure. Even most of the sellers or realtors serve the buyers with champagne and some sweets to make them feel comfortable.
The second thing which makes buyers comfortable is the company and the right guidance by the seller. When a seller gives all the information necessary for a buyer and talk in a friendly way, this makes a buyer impress and this helps to sell a house in a better way.
4. Allows Realtors to Pick up New Buyers
Open houses are a great way for realtors to attract more new buyers.
They need to give buyers more information about premises so that they feel comfortable and can see the house with more interest. After visiting open houses, interested buyers need to consult a realtor.
A Realtor usually arranges these open houses to get more buyers.
Six Downsides of Hosting an Open House Event
Here are six reasons why hosting an open house event may not be a good idea.
1. Fewer Chances of a Sale
According to the National Association of Realtors, only 4 percent of buyers visited open houses.
Private visits by consulting realtors are preferable over open houses. In open houses, a lot of people come which creates a hustle.
In those people, most of the people are not interested in buying houses, they just give a visit to see premises and interior designing of houses.
2. Inexperienced and Unqualified Buyers
In open houses, most people do not even know the process of buying a house.
Before buying a house, it’s essential to obtain a mortgage pre-approval, which most of the buyers don’t have. When a crowd attends an open house, it creates a rush. As a result, you’re likely to get individuals who are not qualified to buy a house or who can’t afford it.
As such, it’s best to have a screening process to identify serious buyers.
3. An Open House Attracts Unserious Buyers
Many people don’t visit open houses for buying purposes. For example, neighbors might visit an open house to learn more about the houses on the block.
These nosy neighbors usually visit open houses to compare their own houses. They also try to find loose ends in their houses which is very annoying.
Sellers do not feel got to attend such people who has no intentions to buy a house.
4. Security Issues
In open houses, a lot of people come and visit the places. Sometimes people target the houses. They visit houses in open houses and note all the details. After knowing all the details people try to break in and vandalize into houses.
These chances are increased after open houses especially in the case of vacant houses.
5. Increased theft scenarios
The risk of theft also increases when you allow a lot of strangers to roam in your home.
Before an open house, take care of your valuable things to avoid such scenarios. Items that might go missing include electronics, jewelry, or even prescribed medicines.
Before arranging an open house, ask your realtor to take precautionary measures to avoid such scenarios.
6. Excessive Stress
Due to the current situation of COVID-19, the housing market is not that hot.
So, the first impression about the house is very important. Open houses make people interested in the house but often open houses make them think that there must be something wrong with the house.
Wrapping Up: Is Holding an Open House Event a Good Idea?
Consider the benefits and losses of hosting open houses.
The outline above suggests that open houses have more negative points than positive ones. While it doesn’t tell the entire story, the points are as close as
On the one hand, open houses attract uninformed individuals that may end up buying the house. On the other hand, the statistical percentage of houses sold through these events is low — about 4 percent.
The bottom line open houses are now old-fashioned. Rather than walk into a stranger’s house, people now rely on virtual tours or online research.
In other words, open houses may not be the best way to sell your house.