When a residential property is listed for sale, an open house is one of the most common marketing tools the seller’s agent might employ. In certain neighborhoods across the U.S., it is not unusual to drive down a grassy street and see snazzy “Open House!” signs pointing prospective buyers to properties for sale, sometimes even with the promise of lunch or dessert.
Traditionally held on a weekend, an open house allows prospective buyers to see a listed property in a relaxed setting, usually without an appointment. Although the pandemic has changed how many real estate agents hold their open houses, these useful marketing tools can benefit all parties involved.
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Why Should Sellers Hold Open Houses?
Real estate agents have many traditional and nontraditional marketing tools for selling a property. Aside from the usual digital and print advertising, open houses are a great tool to efficiently reach a large in-person audience.
“Open houses have always been a great way to maximize exposure on a listing in a short time,” says Alex Entratter, a broker with @properties Christie’s International Real Estate in Chicago.
The first open house is crucial. Entratter advises pushing all showing requests to that initial open house while the property is still new on the market. This strategy “allows a seller to plan and pushes all the demand through in a short time frame with the hopes of multiple offers,” Entratter says.
If a property is new to the market, condensing the initial enthusiasm into an open house can also stir up competition.
“A busy open house often propels buyers to up their offer price due to the fear of losing to the perceived competition that they are observing,” says Linda Skolnick, a sales associate with Coldwell Banker in Westport, Connecticut.
Open houses also enable busy potential buyers to come on the weekend instead of having to leave work during the day. Many interested parties may return to a property during an open house to bring a second set of eyes and walk the residence more relaxed instead of as part of an ambitious schedule of time-limited showing appointments.
And if a property has a price reduction, an open house will often bring in an entirely new crop of buyers who now feel the property is within their financial grasp.
How Should Sellers Prepare for Open Houses?
The day the photographer comes to take listing photos should be the neatest and most beautiful the home has ever looked. Potential buyers should anticipate seeing the home as the fantasy of a new chapter in their lives.
To prepare for an open house, the seller and agent should make the home look as close to a buyer’s dream as possible. Once the photos are taken, it’s understandable that the home will look somewhat lived in again, but the seller and agent should strive to make the home have a similar clean look of photo day.
“Always have the property cleaned, clear all countertops and safeguard personal and valuable items,” Skolnick says. Although 99% of the people who come to an open house are honest, don’t leave anything out that may tempt a recovering kleptomaniac.
The seller must leave, as well. The presence of the sellers can create awkward moments for potential buyers, even if the sellers think they are blending in. Not only should the potential buyers feel comfortable talking about the space and asking questions. it’s essential to create an atmosphere for potential buyers to feel — you guessed it — at home.
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Why Should Buyers Attend Open Houses?
For so many people, time and bandwidth are both limited. Escaping work during the week to see a property can be challenging, and the weekend provides the perfect opportunity to efficiently line up a tour of properties in a specific neighborhood.
Buyers should make a schedule and route for the day, hit as many open houses as possible, take notes and then decide which properties they want to return to later for another visit. “It is often very helpful for a buyer to view properties during an open house at the beginning of their search to educate themselves,” Skolnick says.
Seeing as many properties in person as possible is the best way to educate yourself about the market. While photos, videos and descriptions give a sense of the home, nothing compares to stepping into the space. That experience can be surprising for any buyer who thinks they know everything about a property based on photos.
If buyers can attend many open houses, returning with their agent to the finalists is most constructive and helpful. “If you are really serious (about a property),” Skolnick adds, “you should go with your agent so you can discuss the positives and negatives and have the privacy of being the only ones in the property while you are deciding.”
Is There a Difference Between Open Houses Today vs. in Years Past?
In the past, open houses were a great way for real estate agents to pick up new buyers who needed an agent. Sometimes that still remains the case, but the coronavirus pandemic has changed how many buyers shop for their real estate, whether due to a change in preferences or wildly different market conditions brought on by new migration patterns.
Many agents feel that open houses have changed significantly in recent years due to the pandemic. During the pandemic, most agents changed their open houses to “by appointment only” to control traffic and numbers within their sellers’ homes for obvious health reasons.
With COVID-19 seemingly mostly under control, or at least in many people’s rearview mirror, traditional open houses have returned in many markets.
“From a broker perspective, open houses have always been a ‘back to the basics’ tactic of connecting with new prospective buyers,” Entratter says. “(In Chicago) this has become more valuable in a post-COVID world with buyers doing most of their browsing online and often not seeking representation until they have a home they would like to move forward with.”
During the pandemic, certain cities were hurt by emigration or stagnation, resulting in sagging prices and values. In contrast, others experienced the hottest markets they’d ever seen, with record prices and an ongoing lack of inventory because everything sold at record speeds. Other markets saw sags, surges and then sags again, while the surge still hasn’t ended for others. In these particularly hot markets, if a property is listed at the end of the week, not all prospective buyers can secure an appointment, and even those that can may feel rushed.
“(In Westport, Connecticut,) buyers sometimes might only get 30-minute time slots to view their potential future home,” Skolnick says. “Highest and best offers are often due by the end of the weekend. Having a Saturday or Sunday open house gives buyers a chance for a second look or to see the property if all the showing appointments are already full. It also allows buyers to spend more time in their decision-making process.”
While open houses are mostly held regularly again, not all industry professionals are convinced they still have relevance, perhaps permanently altered by the pandemic years.
“I believe the open house has lost relevance in today’s market,” says Vince Rocco, a licensed associate real estate broker with Brown Harris Stevens in New York City. “It’s been a solid three years, and attendance is significantly down. I don’t see this changing at all. If buyers are serious, they will make a private appointment to see an apartment.”
Open house traffic in certain markets remains hot, while in other markets, it’s inconsistent, with varying attendance patterns depending on the neighborhood, price point or quality of the renovation.
“I believe waning open house attendance (in New York) started with the pandemic and has progressed to buyers not really caring,” Rocco says. “When they buy, it is because something special has come their way and sometimes by accident.”
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Both pre-and post-pandemic, open house traffic is and was very much affected by market conditions. In a hot sellers’ market, it generally increases, and vice versa in a slower market. “Every buyer’s market sends buyers home to lock their door and wait out the market,” Rocco says. “It’s only when things flip to a seller’s market that buyers open the door, run down the street with their hair on fire to overpay and get trapped in bidding wars. It’s astounding to me after 20 years in this business.”
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What Is an Open House? originally appeared on usnews.com
