Open houses in real estate are a highly debated topic by both home owners and real estate professionals. A great number of real estate investors start to ask themselves how they can benefit the most from a real estate open house when looking for an investment property. There are a few good reasons to attend a real estate open house, as nearly half if not more of home buyers do. The biggest benefit is that you can learn from the crowd. Pop in during the last hour and check the sign-in sheet for the number of visitors; a crowd indicates a competitive market. Plus, curious neighbors often drop by, so it’s a great opportunity to ask questions about the community. A real estate open house not only helps investors who are looking for the right investment property, but also benefits real estate homeowners who want to sell their property. Some sellers will insist that having a real estate open house is something that will sell their homes, while others will want nothing to do with open houses, while still other sellers will be on the fence. The same can be said about real estate professionals. Some will swear that open houses are a critical event to have, other realtors will never hold a real estate open house, and still others will occasionally have open houses.
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So, if you’re selling a home, should you have a real estate open house? Almost any decision that has to be made will have its positive outcomes but will also have negative outcomes, and this is no different when it comes to a real estate open house. Eventually, if you’re selling a home and you’re unsure whether you want to have open houses, you need to be aware of the possible positives from having an open house but also need to be aware of the possible negative results from a real estate open house.
Pros to holding a real estate open house
1. Attract buyers who may not know how to start the home buying process
Buying a home is not an easy process, especially for first timers. Home buyers often need a great amount of guidance, tips, and advice throughout the home buying process. Some buyers don’t even know whether they should contact a realtor or a bank first when buying a home. A potential positive to deciding to hold open houses is the possibility for a home buyer who does not know how to start the home buying process to attend. A home buyer who may see a sign on the corner of a street when driving to work in the morning may possibly stop and get more information from the hosting realtor on the home buying process. Having more buyers in the market is definitely a positive for any seller. That is, of course, if they are qualified buyers.
2. Maximum exposure
Choosing a realtor based only on the fact that they will hold a real estate open house every week is one of the biggest mistakes sellers make when choosing a realtor. One of the most important things for a realtor selling a home is making sure his/her clients’ home is getting a ton of exposure. Without maximum exposure and a strong marketing system, the chances of a home selling are greatly lowered. Open houses can give additional exposure to a seller’s home. Whether it’s street signs, a newspaper ads, or any social media postings that are promoting the open house, having a real estate open house can lead to additional exposure.
Related: Selling a House? Ask Yourself These Questions First
3. Eliminates any pressure homebuyers might feel
Open houses, in general, are very laid back events. The majority of real estate investors who host open houses will allow buyers to tour the home with little to no pressure. Obviously, there are some realtors who feel they should be hard selling their seller’s home, but unfortunately this usually just makes them look like an idiot. A real estate open house normally gives buyers the option to view a home without the pressure of a realtor or a seller. Some buyers like to analyze a home in detail without having a time restriction or pressure. This can allow a buyer to identify whether he/she likes a home and also look at the items that he/she should be looking at when viewing homes.
Cons to holding a real estate open house
1. Small chance of a sale
Are open houses necessary to sell a home? The answer is absolutely not! The percentage of homes that actually sell as a result of a real estate open house is small. The majority of homes are sold when a buyer has a realtor, requests an appointment, and tours your home privately. The crowd that a real estate open house attracts is more than likely not going to be the crowd that is going to purchase the home.
2. Unqualified buyers
One of the first steps in the home buying process is obtaining a mortgage pre-approval. It’s important to obtain a mortgage pre-approval for many reasons when buying a home. One drawback to having open houses is the possibility of unqualified buyers’ attending the open house. Would you want people walking through your home that cannot afford to buy it? Of course not! It’s next to impossible to screen open house attendees to ensure they are qualified to purchase the home.
Related: House Hunting Lessons for Real Estate Investors
3. Lack of one on one attention
As a real estate investor who wants to sell his/her investment property, you always want to have the best of the best, especially when it comes to talking with potential buyers. With a real estate open house you’re not able to communicate one on one with your guests. This means that if things get busy, there will be a lot of missed opportunities and people that may have been good prospective buyers will never get the chance to speak with you. There is no way for an open house visit to compare to an actual home viewing with your real estate agent. Most people who come by and visit are probably going to want to return at a later date to really check things out if they are serious buyers anyways.
So, in the end it all depends on what type of real estate investor are you. Do you see the glass half full and take the risk of having a real estate open house or are you an over thinker who has to calculate everything before taking any decisions? A real estate open house has it ups and downs, but it all comes down to choosing potential buyers and making the right moves. Be sure to check out Mashvisor for the latest real estate investing tips and strategies.