Open House: When It's Worth It -- or Not
To help sell her Austin, Texas condo, Tara Akins held a series of weekend open houses. Despite the fact that they were "well attended," according to her real estate agent, the eventual buyer came not from one of the open houses but through a private showing.
For many sellers, that's how the home-selling process unfolds. Open houses help to market the property and pull in viewers, but the buyer ultimately comes through another avenue, leading some real estate experts to question the effectiveness of the home tours.
If you're thinking about whether or not to hold an open house to help sell your property, here's how to weigh the advantages and disadvantages, as well as tips for getting the most out of this home-selling tool.
One of the biggest advantages is that serious buyers overwhelmingly use open houses in their research. According to Geoff Walsh, an agent with Weichert Realtors in Dallas-Fort Worth, 95 percent of people looking to buy a home visit an open house within three months of buying.
The biggest problem is that open houses also draw a large number of lookers who aren't intending to purchase in the near future. So the open house "usually doesn't sell the house," says Matthew Coates, a Phoenix real estate agent with West USA Realty Revelation.
But even non-buyers can provide valuable information, offering their reactions on everything from the price, to the layout, to the number of bathrooms--and especially about the features of the house that they don't like. "The open house provides feedback from the general public to the seller to correct those things," Coates says.
The bottom line: While an open house may not always yield a buyer, increased foot traffic and feedback can't hurt. Brendon DeSimone, a San Fransciso-based broker with Paragon Real Estate Group, estimates that about one-third of the time, open houses lead to the sale of a home. "It's a staple of real estate," he says. "You have to do them."
Secrets of a successful open house
The key to a productive open house, experts say, is scheduling it so that it's convenient for potential buyers. Typically open houses are held on the weekends, so that working professionals and busy parents can have the opportunity to attend.
Open houses also should be held with regular frequency, even if only for a small window of time each weekend, so that buyers who missed it or were viewing other properties can come back the following Sunday to get a peek.
According to DeSimone, there are only a few situations when he skips the open house: when the property is a fixer-upper and it's dangerous to be inside; if tenants are living in the home; or if it's a high-end property and the owners have concerns about privacy, theft or damage.
How an open house is conducted is also a factor in its success. Walsh stresses the need to have a real estate agent on-site who is not only welcoming and friendly but also has expert knowledge about the construction of the house, its location and the dynamics of the local real estate market. When not to hold an open house
Sometimes a house's location, style or condition can make it a bad candidate for an open house. For example, a remote or hard-to-access location can sabotage the benefits of drive-by traffic, says Coates, or it can discourage potential buyers from showing up altogether. If you're more than two or three turns away from a major intersection, think twice about holding an open house, he advises.
In addition, Coates points out, condos and townhomes don't pull in as much traffic as single-family homes. It's harder to be enticed by a condo from the street, and a bigger hassle to locate and get to the unit within the building. Putting up signs outside the building, as well informing the doorman or leaving instructions for how to find the unit, are good proactive measures.
An even bigger challenge is dealing with flaws with the house that buyers only perceive when they arrive in person, such as odors from pets and smokers, or neighborhood issues like a nearby railroad, electrical tower or another home built too close. In that case, says Walsh, the seller may have no choice but to make compromises on the price of the property.
Fighting the "Internet factor"
Unlike pre-Internet days, buyers' expectations today are skewed by what they've already seen of your house online. "It used to be the first impression was the drive-by," says DeSimone. "Now the first impression is hitting the Internet."
How sellers represent their homes online has a big impact on the success of an open house. If potential buyers like what they see online, then they'll want to verify it in person.
In addition to listing through a real estate agent, sellers can stand out online by using search engine optimization, photos, virtual tours, videos, and even creating a website for the house with its own Web address. Brokers advise providing a photo or two of each room to entice buyers, but not to reveal everything. "You want to leave something for when they get there," says DeSimone.
Ultimately it was the online listing rather than an open house that snagged the buyer for Tara Akins' condo, though Akins says that she felt lucky to have so much traffic through the place. After seeing the house online and via two in-person visits, the buyers made an offer a little more than a month later.
Find out how to calculate mortgage payments.
