ALL ABOUT OPEN HOUSE IN REAL ESTATE
What is an Open House?
An open house is just as it sounds. In the real estate world, it’s an open invitation to potential buyers to come and have a look at the house for sale without making any appointment on the scheduled day.
The realtor puts an open house sign in front of the house for sale so people walking or driving by can come in and make an offer on the house on the spot if they like the house. An open house is not an auction but potential buyers can bid on the house and if the seller likes any one of the offers, he/she may accept it.
Who can do an open house?
A realtor or the owner can do an open house by advertising it in the local newspaper, radio or by distributing flyers in the neighborhood. A realtor may be better in doing an open house than the owner as he/she is a professional, and he/she has better access to real estate marketing tools than the owner. Anyway, there is no rule in who can do an open house as long as the goal is achieved by getting the house sold.
( Advice: Hire a local realtor. Trust me, you will save in the long term by paying him commission )
How is an open house done?
Real estate agent or the owner will advertise the day and time when potential buyers can come and walk freely in the house. Potential buyers may bring their own realtor with them, who can advise them on pricing the house. A real estate agent may have an advantage over an average homeowner in advertising open house as he/she has access to MLS®, which gives them the ability to reach a higher number of potential buyers. There are some free sites like homeZfinder.com and Zillow which give people access to advertising their open house free of charge. On the scheduled day of the open house, the realtor will install open house arrow signs at the intersections of the main roads close to the house and put an open house sign in the front of the house with balloons to attract potential buyers driving or walking by.
Some real estate agents do a Mega open house by delivering open house flyers door to door and talking to people in the neighborhood by telling them amenities of the house. They will also advertise aggressively on local radio, TV, and the newspaper about the time and attraction of the open house beforehand and create a buzz in the city about the house. Flyer distribution in the neighbourhood gives a great advantage as a local resident may know someone, like their friend or a relative interested in buying in the area.
What is there for a realtor in open house?
First off, The realtor makes a commission if he/she sells the house. Secondly, the more important thing is he/she may get a future client by collecting his/her information by asking them questions about the open house and requesting them to give feedback about the house thus knowing about their taste, the kind of house they are looking for?
If the realtor happens to know the kind of house they are looking for he/she may sell them the house they like.Third, the realtor will get the phone number or email of the clients in the open house to market his/her services to them.
What are the benefits of an open house?
The biggest benefit of doing an open house is the ability to show the house to a large number of potential clients together. Open house is an invitation for potential buyers to walk in the house without an appointment.
Open house makes showings easy instead of booking a showing individually. In case the house is a rental there can be a problem showing because of a bylaw, the tenant has to be notified 24 hours before booking a showing. In some cases, tenants make it difficult to show the house as they are worried about moving out after the sale of the house.
Home showings by appointments are difficult during the holiday season or on a weekend. Weekends are when everybody wants to book appointments as they are off work. Weekends are also the days when kids might want to wake up late, or guest visits, or various other reasons.
The most difficult part for an individual showing is the need to clean the house before the showing. It’s cumbersome especially if the seller has smaller children. Open house is the day when you only clean the house once and show it to the larger crowd.
The open house gives an opportunity to the seller to sell a home at a higher price as there might possibly be multiple offers on the house as an open house has a tendency to create a bidding war situation when the market is going up or it’s a seller’s market. The bidding situation can arise because potential buyers at the open house don’t want to lose the house at any cost.
What is the best day to do an open house?
The best day to do an open house is on weekends because people are off work and gone shopping and they may then see an open house sign and may possibly be interested to see the house. There appear to be some investors who watch the market and attend each open house on the weekend as they’re off work. Some people want to see the house to compare it with their own house and get a good idea of decorating their home.
Preparation to do an open house?
Preparing your house for an open house is important to make it attractive to potential buyers so they make an offer. On the day of the open house make sure everything is tidy and clean. Put stuff away, clean the yard and if needed spend money on house stagers. They may cost you a few thousand dollars, but it’s worth it. Home stagers can make your house look perfect as they are professionals and know all the latest trends in home decoration.
Sometimes the realtor or homeowner may offer snacks and coffee to the buyers to get their attention on the amenities of the house.
Another important step is that sellers must keep all their valuables locked up in a safe or somewhere secret as the realtor may not be able to watch all of the clients attending the open house. Although it’s very unlikely for someone to steal something, you never know who is visiting because everyone is welcome to the house.
Buyer comes with an own realtor or not?
Some clients come to an open house without their own realtor. This is a big disadvantage for them as dealing directly with a listing agent may not give them any agency so they are not protected in case something happens during or after the deal.
At the end, the open house has more benefits than the drawbacks.