Are Open Houses Worth It? When One Might Make Sense

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Perhaps you’ve outgrown your current home and have found the perfect house for your expanding family. Your Realtor® wants to hold an open house, but you are uncomfortable with strangers wandering around while you’re not there. So you’re wondering…are open houses worth it?

“If you want to get the highest possible price, you want to be able to have the opportunity for every buyer that’s interested to view your property,” says Chiquita Pittman, a top-performing real estate agent in New Jersey whose expertise includes first-time buyers and foreclosures.

She recommends an open house to accomplish this goal, especially when inventory is as low as it is right now.

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What is an open house?

An open house is a marketing tool that increases the exposure of the property by allowing prospective buyers to tour the home during a specified period of time.

Typically held on weekends while the seller is absent, the listing agent can answer questions about the house. Attendees are asked to sign in and provide contact information so the agent can follow up and provide feedback to the seller about issues that should be addressed to improve marketability.

A slower market = more open house demand

The real estate market is slowing down amid soaring interest rates, as well as price spikes that are putting homeownership out of reach for many Americans.

Existing home sales rose in the Northeast but fell in the Midwest, South, and West in September 2023. All four regions registered year-over-year sales declines, according to the National Association of Realtors® (NAR). The median sales price of existing homes dropped  5.2% from one year ago to $394,300.

30-year conventional fixed-rate mortgages in September hit above 7%.  It reached 7.63% in the third week of October—the highest rate since 2000, according to Freddie Mac. Home sales have declined from 6.9 million in 2021 to 5 million in 2022 and 4.3 million by May 2023.

“Purchase demand continues to tumble as the cumulative impact of higher rates, elevated home prices, increased recession risk, and declining consumer confidence take a toll on homebuyers,” says Khater.

Pittman has seen the recent slowdown with more frequent price reductions and houses selling in two to three weeks rather than a few days. She expects open houses to increase in popularity as homes take longer to sell and foot traffic lessens.

While 72% of agents surveyed by HomeLight say it’s still a seller’s market, in that demand far exceeds supply. 53% of agents report that bidding wars have increased over Q1 of 2023.

Are open houses worth it? If you want to do everything possible to sell your house quickly for the most money as demand and appreciation slow, the answer is often yes.

When are open houses worth it?

While 47% of buyers look online and 18% contact a real estate agent as the first step in the homebuying process, only 1% begin at an open house. Yet 28% attend an open house during their home search, according to a recent NAR report. Don’t overlook the influx of potential buyers to your open house who want to see the property in person.

If homes in your area sell as soon as they come on the market, yours might be under contract before you can put up an open house sign. But an open house could maximize exposure and competitive offers in these situations:

  • Your home stands out from other houses in your neighborhood with unique features such as a mother-in-law suite.
  • You live in a high-demand, populated area, so you’ll showcase your shiny hardwood floors and trendy boutiques and restaurants just a short walk away.
  • Your property has highly sought-after attributes that are hard to find such as ample space for RV parking or a waterfront view.
  • Your entry-level home appeals to first-time buyers. “I consider them to be on the front lines of homebuying,” Pittman remarks. With rents increasing and mortgage rates, she says first-time buyers are extremely motivated to get their piece of the American dream and visit open houses conveniently held on weekends.

On the other hand, if you’re selling a luxury house in an exclusive neighborhood, showings by appointment are preferable and avoid the risk of theft. Pittman also advises against open houses for properties located in high-crime areas.

Perks of an open house

Your open house might not generate an immediate sale, but preparing for it will prepare your home for dazzling photos and worthwhile private showings. And if inventory is low in your community, it could be over quickly when buyers who previously lost bidding wars raise their offers so that another house doesn’t get away. An open house could be less hassle than the inconvenience of frequent showings.

Consider these other benefits:

  • Pittman says the biggest advantage is that prospective buyers see their competition which encourages them to make their best possible offer, especially if they’re frustrated after having multiple offers rejected. “That’s the number one reason I see buyers love coming to open houses—they want to see the competition,” she says. Open houses can also incite bidding wars.
  • Prospective buyers prefer the convenience of an open house rather than work a private showing into their busy schedule, especially if they live out of state.
  • Buyers are more relaxed walking through an open house without an agent looking over their shoulder so they take their time and envision themselves living in the home.
  • The marketing blitz promoting your open house provides additional exposure that attracts buyers who schedule private showings.
  • House hunters who viewed photos or videos online experience your home in person from a completely different perspective. They’ll fall in love with the oversized walk-in shower or upscale outdoor kitchen they can see for themselves.
  • Your real estate agent will provide constructive feedback about concerns mentioned during the open house that can be easily resolved for a faster, more profitable sale such as repainting unsightly walls with appealing colors.

Open house pitfalls

Only 4% of buyers find the home they purchase from an open house sign compared to about half who discover their dream house online or 28% through an agent. So your listing agent is more likely to pick up leads for new clients than a buyer for your home.

Beware of these additional drawbacks:

  • Open houses attract people who are not financially qualified or pre-approved for a mortgage. They may be casual viewers, exploring different neighborhoods or searching for decorating ideas. However, Pittman has seen a recent uptick in serious buyers who are tired of battling against rising rent.
  • Buyers visiting several open houses in one day may be too worn out to give your home their full attention.
  • An open house could leave you vulnerable to theft or vandalism, especially if you’ve already moved out. To reduce this risk, remove jewelry and other valuables as well as prescription drugs. Ensure that passports, bank statements, and other documents with personal information are not in plain sight to avoid being a victim of identity theft.

Plan for success

If you’ve decided an open house is worth it, read on for strategies to ensure your event succeeds.

Weekends work best

Hold your open house on the weekend, particularly the first weekend after listing your property to create a sense of urgency. Sundays usually work best, but during football season opt for Saturday so you won’t compete with the big game.

Hype your open house

Marketing is the key to a successful open house. A top agent will advertise the date, time, and location of your open house along with photos and descriptions of your property on the Multiple Listing Service (MLS), a digital platform used by real estate brokers and agents.

Promote your open house effectively and inexpensively at least 2 to 3 weeks in advance on social media so tags, shares, and likes generate lots of buzz. Online platforms include:

  • Nextdoor connects neighbors and offers an events calendar to post your open house.
  • Facebook allows users to network with family, friends, and colleagues. Spread the word with posts on your profile or create a Facebook open house event. Other options include targeted ads or advertisements with photos in the Facebook marketplace.
  • Create excitement about your open house by posting on X (formerly Twitter) and showing off amazing photos on Instagram. But be sure to use relevant hashtags for maximum exposure such as #openhouse or #househunting.
  • Post the open house on your agent’s personal website or blog and their agency’s online platforms to reach colleagues whose clients are looking for a home in your neighborhood. Your agent will also suggest real estate sites such as Zillow, Trulia, and Realtor.

We live in a techie world but don’t overlook the impact of physical signage to attract potential buyers. Unless prohibited by your homeowner’s association or municipality, place at least 10 to 15 open house signs around your neighborhood, at major nearby intersections, and on your front lawn.

Distribute flyers advertising your open house to supermarkets, shops, and community centers for placement on public bulletin boards.

Although nosy neighbors may show up, this isn’t necessarily a bad thing. A few days before the event, make a phone call inviting them or hand deliver an invitation.

People move a median distance of 50 miles to their new home, according to NAR’s latest Profile of Home Buyers and Sellers. You never know when nearby residents look for a larger house in the same school district. They may have friends or relatives who want to move into your neighborhood.

Take these steps to prep

Your open house could backfire if you don’t take the time to prepare. “You have to do the prep work in order to get the top price,” says Pittman.

Clean, declutter, and take care of minor repairs to make a good presentation. Otherwise, your open house can have a negative impact as buyers decide whether to make an offer. Obvious maintenance issues give them a reason to lower their bid, so preparation is vital.

Take the same steps to prepare for your open house as you would for showings. After it’s over, relax because you’ll be all set for buyers who schedule a private tour. Follow these tips to make the most of your open house and subsequent showings:

  • Declutter so your house seems less personal to allow potential buyers to imagine themselves living there. Remove family photos, pack up belongings you don’t need on a daily basis, and donate items you haven’t used in years. Not only will you create additional space that makes your home seem larger, but you’ll also get a head start on moving day.
  • Deep clean to make your house shine. Clean from top to bottom including all the places where dust and cobwebs hide. The average cost of $170 for a professional cleaning service might be worth the time saved by doing the work yourself.
  • Don’t overlook your property’s exterior. Power wash the driveway, walkway, and outside walls. Mow the lawn, trim the hedges, and weed the flowerbeds. Not only will you make a terrific first impression, but great curb appeal can increase your sales price an average of 7%.
  • Stage your house so buyers can visualize it as their future home by adding and rearranging furniture and modifying decor. Staging helps a home sell faster and raises the dollar value offered between 1 and 5%, according to the NAR’s 2023 Profile of Home Staging. Ask if your real estate agent offers complimentary staging or recommendations for a professional service that costs $784 to $2,812.

Tips to make the most of your open house

Follow these additional tips to reap the benefits of your open house:

  • Create a property description sheet highlighting the unique features of your home that buyers can take with them. Start with a catchy headline, use descriptive language, and highlight amazing amenities.
  • If you’ve done a pre-listing home inspection, provide copies of the inspection report to be upfront about your home’s condition. Some buyers may waive the home inspection contingency if satisfied with the results.
  • Play background music to create the perfect atmosphere for your open house. Pop and rock genres are most popular for selling a home, according to a survey by Living Cozy, an online source of homeware and furniture.
  • You’ve worked hard preparing for the open house, so take off for a few hours during the event and enjoy an activity with your family. Bring pets with you or make arrangements for them. Potential buyers feel more at ease without the homeowner present. They take their time to explore and picture themselves living in the home. Your agent will answer questions and call attention to features they shouldn’t miss.
  • A top real estate agent knowledgeable about local market conditions can help you decide if an open house is worth it. Your agent will guide you in preparing for and promoting a successful open house. Connect with agents experienced in marketing homes faster and for more money via HomeLight’s Agent Matching platform.

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Open houses are worth it to maximize exposure and price

Fierce competition and limited inventory prompted 9% of buyers to purchase homes sight unseen, relying only on virtual open houses, tours, and showings, according to a recent NAR survey. Although technology is here to stay, as mortgage rates climb and home prices spiral, buyers who first view their dream home on the Internet will want to see what is probably the biggest investment they will ever make.

Pittman has seen deals fall apart when the buyer made an offer after a virtual viewing, but the property didn’t live up to the online presentation in real life.

Prospective buyers will likely visit the home in person, so open houses make sense.

While there’s no guarantee of an immediate offer, open houses are worth it since the increased exposure and foot traffic will improve your chances of selling your home at a higher price.

Header Image Source: (Adam Winger / Unsplash)

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