What is an Open House?
In real estate, an open house is a scheduled period of time in which a house or other dwelling is designated to be open for viewing by potential buyers.
The term open house can also refer to the real estate property itself; in either case, it applies to dwellings that are for sale by the owner. They are often held to advertise a newly developed community.
How an Open House Works
In the real estate market, buying and selling a property is an example of a relatively illiquid market with dissimilar products. Each house is going to be different than the next, even if they are in the same neighborhood or even on the same block. During an open house, the seller or seller's agent allows potential buyers to enter and walk through the property at their leisure or guided by a realtor. The goal of an open house is to secure interest from buyers.
Many open houses occur on weekends, in particular Sundays, with banners and other fanfare used for advertisement. Owners keep the houses clean and immaculate during this time, to attract potential buyers. Some owners or agents also serve cocktails or hors d'oeuvres at these events.
- An open house is a scheduled period of time in which a house is open for viewing by potential buyers.
- Open houses can attract interested buyers and lead to an offer, or alert the realtor to issues with the space.
- On the flipside, they can entail a huge amount of effort in organizing. Online listings provide a wider reach for potential buyers.
Advantages and Disadvantages of Open Houses
For people trying to sell their homes, an open house provides an opportunity to attract interested buyers to the property. A well-executed event can generate excitement about the home and potentially lead to an offer. Many realtors advise their clients to hold an open house the first weekend after the property goes up for sale.
Even if the event does not snag a buyer, an open house can still be beneficial. As visitors walk through the home, they are likely to discuss their perceptions of the home. This feedback can alert the realtor to issues that might be preventing the house from selling. Unattractive paint colors, for example, can be an easy fix that can boost a home's selling potential.
Attracts interested buyers
Alerts realtor to issues with the house through visitor feedback
Can entail more effort in organizing than its worth
Online listings can cast a much wider net for potential buyers
For some sellers, an open house entails more effort than it is worth. During the event, the property owner must leave the property to give the realtor free rein. This means making alternate arrangements for children and pets. Owners also need to remove personal items such as photographs that can prevent prospective buyers from imagining themselves in the home. Due to safety concerns, some sellers are also hesitant to have groups of strangers walking through their homes.
According to the National Association of Realtors, just 4% of buyers visited open houses. This statistic goes against the common belief that opening a home to the public for a few hours on the weekend will draw foot traffic that will translate into a sale. With the advent of the Internet, most properties are listed on the Web before the first open house is even scheduled. Home seekers can view photos and information about the property's condition on a website, allowing homeowners to cast a much wider net for potential buyers. For some sellers, this can make open houses seem obsolete.
Broker's Open House
In contrast to a traditional open house, which is open to the public, a broker's open house is strictly for real estate professionals. The intention of a broker's open house is to give real estate agents an opportunity to view the property. It also allows the seller's realtor to solicit professional opinions from peers about the property and its price. In many cases, the broker's open house encourages buyer's agents to schedule a showing for their clients.
A broker's open house usually is held midweek when agents are more available than on weekends when they are occupied with showing homes to their clients. A broker’s open house is among the tools that real estate agents use to market a home. In addition to internet marketing systems like Multiple Listing Service (MLS), it's a way to introduce a listing to industry professionals in a community.