What Is an Open House?
In real estate, an open house is a scheduled time when a house or other dwelling is designated to be available for viewing by potential buyers. Usually, the owners or renters vacate the house when the broker holds an open house.
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.
- An open house is a scheduled period of time in which a home is available 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 that might be pointed out.
- On the other hand, open houses can entail a considerable amount of effort in organizing.
- Some realtors may serve light refreshments at an open house or even cocktails during an evening open house.
- An open house is a great, low-pressure way to show the house to potential buyers.
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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 will be different from 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. Open houses allow interested buyers to take their time looking at the house and surrounding property, rather than a shorter one-on-one appointment with a broker.
Many open houses occur on weekends—Sundays in particular, and brokers use banners and other fanfare as advertisements. During an open house period, owners keep the houses clean and organized to attract potential buyers. Some owners or agents also serve coffee, cocktails, or hors d'oeuvres at these events.
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.
Open Houses Are Hard Work
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 might prevent prospective buyers from imagining themselves in the home. Due to safety and theft concerns, some sellers are also hesitant to have groups of strangers walking through their homes.
Driving Traffic With Open Houses
According to a 2021 report from the National Association of Realtors (NAR), just 4% of all buyers visited open houses as the first step in their home buying process. This includes 6% of seniors ages 75 to 95 and just 2% of younger people (22 to 30 years). Most buyers begin the home buying process by either contacting a real estate agent or browsing online. However, the majority (53%) will attend an open house, mostly between the ages of 31 to 55. These statistics go 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 online before the first open house is 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.
Attracts interested buyers
Alerts realtor to issues with the house through visitor feedback
May lead to an immediate offer
Is a great way to show the house to a lot of people at once instead of drawn-out one-by-one showings
Can entail more effort in organizing than its worth
Online listings can reach more potential buyers in a shorter amount of time
Usually, owners must leave their homes during all open houses
Open houses may be a potential for theft, especially if the event draws a large crowd
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. A broker's open house intends to allow real estate agents to view the property. It also allows the seller's realtor to solicit professional opinions from their peers about the property and its price. In many cases, the broker's open house also encourages buyers' 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 online marketing systems like Multiple Listing Service (MLS), it's a way to introduce a listing to industry professionals in a community.
Sellers should make sure to remove or hide any valuables before an open house event to protect themselves against theft. In addition, it is also a good idea for your broker to require all visitors to sign in with at least their full names, email, and phone number.
Open House FAQs
How Do You Find an Open House?
You can find listings via online real estate marketplaces, on social media, and by simply calling local realtors and asking them about upcoming open houses in your area.
Can Anyone Go to an Open House?
Open houses are a way for potential buyers to see new homes on the market, but anyone can attend an open house.
Should You Go to an Open House Before Making an Offer?
You don't have to go to an open house before making an offer, but it is usually a good idea to a property in person before making an offer. However, during the 2020 economic crisis, many realtors ended up selling homes to eager buyers based solely on photographs and information available on online listings.
What Should You Serve at an Open House?
You do not have to serve refreshments at an open house, but it might be nice to offer potential buyers coffee, tea, water, and cookies. If it is an evening event or a specialized open house, you could offer mocktails or cocktails with hors d'oeuvres.
Should You Stage an Open House?
Nearly half of buyers' agents (47%) agree that some form of staging is a good idea when selling a house, according to the National Association of REALTORS. Staging a house is a skill, and it involves making a home appealing to a wide pool of buyers. Fresh paint, removing clutter, and keeping it extremely clean are easy ways to stage a home. When brokers sell a newly built home, they often use stagers to set up every room.
How Long Do Open Houses Last?
The length of an open house event varies depending on the property, the broker, and the seller. It could be as short as one hour or an entire morning or afternoon. Open houses are not typically held all day, but some brokers prefer to have them. It is not atypical for a broker to hold several open house events when selling a home.
The Bottom Line
Open houses are one way to bring potential buyers into a home. There are a few types of open houses. Traditional ones are available to the public, and anyone interested in seeing the house can attend. For example, a broker's open house allows real estate professionals to view the property. During a broker's open house, buyers' agents are encouraged to set up showings for clients.
Open houses require work by the seller and their real estate agent and may not be worth the effort in some markets. Interested buyers can view homes first online with photographs and even 360-degree virtual tours of properties before making an in-person appointment. The advent of this technology has impacted how buyers view and buy homes, and while open houses are still helpful to sell a house, they may not always be necessary.