Driving through your neighborhood, you may have seen a sign for an open house. But have you ever wondered what exactly is an open house? Quite simply an open house is when a seller, well, opens their house, and invites potential buyers into the property.
Open houses for buyers
When people want to buy a house, they typically hire a real estate agent. Agents offer a lot of beneficial services that aid in the process of buying, selling, negotiating and more. However, if you aren’t yet in a relationship with an agent, or just beginning to “look,” touring an open house offers an opportunity to view properties yourself. Typically, open houses are held on weekends, increasing the chance of more visitors. Many people enjoy the flexibility of just “popping in” rather than having to make an appointment with a real estate agent or homeowner.
Why sellers have open houses
From the seller’s perspective, an open house can be efficient use of time. It allows a large number of people to tour the home in a defined window of time. A busy open house can also give buyers a sense of urgency to put in an offer.
Open houses for the agent
Additionally, open houses are often held by eager agents. It’s not uncommon for an agent to use an open house as a way to generate new leads and business in addition to trying to sell the home. Just think about how many neighbors will be coming through the home to see what it actually looks like and to find out how much it is selling for. These are all prospective clients for the agent, in addition to any prospective buyers not working with agents.
How does an open house work?
It’s really very simple. This is when the seller or seller’s agent allows potential buyers to enter and walk through the property at their leisure or guided by a realtor in order to check out a property without arranging for a specific showing. The goal of an open house is to secure interest from buyers for the house but also to attract interest from other potential customers for the future.
Schedule and market a time
When you have an open house, the seller and the seller’s agent should schedule and market a time. Many people pick a weekend day or two for a few hours in the late morning to early afternoon, because that’s the time that most people are free to visit an open house and aren’t working. It’s also a chance to really show off the neighborhood in its most positive light with people relaxing, enjoying the outdoors, doing yard work, gardening etc., instead of just coming home from work and shutting the door. And since you’re sure to get more people on a weekend open house, this could have the added benefit of increasing buyer competition for the house, since a prospective buyer may see other potential buyers coming through the house during the same period of time.
Host the open house
During the open house, the seller or seller’s agent should have materials available about the house and a sign-up sheet for more information. The seller’s agent should also be putting banners and signs around the neighborhood to attract customers. The seller should make sure to keep the house clean and immaculate during this time in order to attract and please potential buyers. The seller should also make sure any pets or kids are not around. Many agents also provide snacks and drinks for prospective buyers.
Follow up on the open house
After the open house is over, the seller’s agent and seller should assess the success of the open house and proceed from there. Is there contact information that potential buyers have left so that the seller’s agent can reach out to them for additional follow up? Will it be necessary to do an additional open house, and how will it differ from the first one?
Pros and cons of open houses
The pros of hosting an open house are that they attract interested buyers and alert seller’s agents to potential issues with the house through feedback given by the visitors (i.e. the garage is too small, the 3rd bedroom is a little cramped, etc).
The cons of an open house is that sometimes they are more effort than they are worth, especially if nobody shows that turns out to be a serious buyer. And honestly, online listings with expanded targeting on social media and google can often reach an entire city much more quickly and effectively than just entertaining people from the neighborhood.
Alternatives to an open house
The seller is never required to have an open house. If the seller’s agent suggests one, of course it’s up to the seller to participate or not participate. Some people don’t want large groups of people wandering through their home, and that’s okay. Additionally, not everybody that comes to an open house is there for the open house, Beware of thieves and hide your expensive jewelry and other items. Also sellers who prefer not to have the public touring their home can select another option called a broker open house.
What is a broker’s open house?
A broker’s open house is only for real estate professionals and is not open to the public. The broker’s open house is intended to bring in prospective buyer’s agents that will like what they see and want to schedule a showing for their own clients. These are often held midweek, as that is when many agents are working, so they can more easily attend the “meeting” at the broker’s open house. Typically when agents come to this, they will later involve serious buyers in the seller’s house, not just neighborhood looky-loos.