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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 specialities include first-time buyers and foreclosures. She recommends an open house to accomplish this goal, especially when inventory is low as it is right now.

What is an open house?

An open house is a marketing tool that increases exposure of a property by allowing prospective buyers to tour the home during a specified period of time. Typically held on weekends while the seller is not present, the listing agent is available to 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.

Slightly more than half the agents surveyed by HomeLight before the pandemic began advising clients to hold an open house. Fears of catching Covid-19 halted open houses in hard-hit areas and significantly reduced their number in other locations.

Buyers viewed virtual open houses and tours, even purchasing properties without actually setting foot inside. Traditional open houses looked far different with small groups allowed at one time to promote social distancing, masks hiding facial expressions of buyers, and the smell of hand sanitizer overtaking the scent of freshly baked cookies.

With interest rates the lowest in decades and inventory in short supply, buyers competed in bidding wars and paid well over asking price for the home of their dreams.

Slower real estate market heightens need for open houses

But the real estate market is slowing down as soaring interest rates and prices have put homeownership out of reach for many Americans.

Existing-home sales fell for the fifth consecutive month to a seasonally adjusted annual rate of 5.12 million in June 2022, a decrease of 5.4% from May and 14.2% from the previous year, according to the National Association of Realtors® (NAR). Although the median sales price of existing homes jumped 13.4% from one year ago to a new all-time high of $416,000, Sam Khater, Freddie Mac’s Chief Economist, expects more moderate home appreciation in the future.

Freddie Mac reports that the 30-year conventional fixed-rate mortgage averaged 5.30% at the end of July, nearly double the 2.8% rate this time a year ago. Home sales are expected to drop from 6.9 million last year to 6 million in 2022 and 5.4 million in 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 firsthand 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 95% of agents surveyed by HomeLight say it’s still a seller’s market, agents are less upbeat with 59% being optimistic compared to 80% a year ago. Two-thirds of agents say bids are fewer when multiple offers occur, while 44% indicate a decrease in bidding wars. About one-third report that price cuts are more common.

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 41% of buyers look online and 19% contact a real estate agent as the first step in the homebuying process, only 2% begin at an open house. Yet 41% attend an open house during their home search, according to a recent NAR report. With 95% of buyers using the Internet in their quest, they most often walk through the home they view virtually. So 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 as well as 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 as well as 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 the weekend.

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

Open house pros

Your open house might not generate an immediate sale, but preparing for it will get your home ready for dazzling photos and worthwhile private showings. And if inventory is low in your community, it could be one and done when buyers who lost out on bidding wars raise their offers so 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 on the Internet 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 may not be financially qualified or pre-approved for a mortgage. They may be casual lookers exploring different neighborhoods or searching for decorating ideas. However, Pittman has seen a recent uptick in the number of serious buyers who are tired of paying rent that keeps rising.
  • 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. Criminals could scope out your property for a future robbery or help themselves to a few expensive souvenirs. To reduce this risk, remove jewelry and other valuables as well as prescription drugs. Make sure that passports, bank statements, and other documents with personal information are not in plain sight to avoid being a victim of identity theft.
  • Having strangers in your home increases the risk of exposure to Covid-19 or other germs.

Plan for success

If you’ve decided that 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.

Follow health protocols

To put the seller at ease regarding Covid concerns, Pittman recommends requiring a mask, providing hand sanitizer and shoe covers, and wiping down high-touch surfaces with Clorox wipes. Place limits on the number of buyers allowed in the house at a time, no more than eight to ten people. Long lines waiting to enter also create competition and bring in higher offers. While guidelines established during the pandemic may stick around for a while, ultimately the seller decides which measures should be followed.

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 description 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 tweeting on 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 as well as 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 their public bulletin boards.

Although nosy neighbors may show up, this isn’t necessarily a bad thing. In fact, a few days before the event, make a phone call inviting them or hand deliver an invitation. People move a median distance of 15 miles to their new home, according to NAR’s latest Profile of Home Buyers and Sellers. You never know when nearby residents are looking 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 get ready for your open house as you would for showings. After it’s all 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 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 $120 to $235 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 as well as modifying decor. Staging helps a home sell faster and raises value by up to 10%, according to the NAR’s 2021 Profile of Home Staging. Ask if your real estate agent offers complimentary staging or for recommendations of a professional service that costs from $749 to $2,820.

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 point out 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.

Eliminate the hassle with Simple Sale

If you decide that the disadvantages of an open house outweigh the benefits or prefer to avoid showings altogether, consider HomeLight’s Simple Sale platform. Just answer a few quick questions about your home, its condition, and your selling timeline. You’ll get a competitive cash offer without financing contingencies or costly repairs.

Open houses are worth it to maximize exposure and price

Fierce competition and limited inventory prompted 12% 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 for themselves 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 are likely to 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 sales price.

Header Image Source: (Adam Winger / Unsplash)

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