Are Open Houses a good idea?
Is an open house a hassle-free way to get a quick sale and better price for your property? Or could it put off potential buyers? We look at the pros and cons.
So, what is an open house and how it is different?
An open house restricts viewings of your property to a few hours on a single day. It’s an alternative to individual appointments stretching over several weeks or months. It may be that anyone can drop in during that time slot or an estate agent will book back-to-back appointments. The seller will usually set a guide price for the property and after they have looked around, visitors will be invited to make a bid. Ultimately, the aim is to obtain an offer the same day.
“In terms of convenience, it’s great for clients. We have an open house booked for this Saturday. All the appointments are grouped together and hopefully that’s it. Job done. Property sold,” said estate agent Daniel Coombes of Southdown Property Solutions.
An open house encourages faster decision making and better offers, say supporters. “You can get a bit of a buzz if people are shown around the property at the same time. They will fight for it if they know others are interested too. The seller can end up getting higher offers,” said estate agent Vicky Vanner of Liverpool Property Solutions.
Daniel agreed. He said: “We have achieved between £10,000 and £15,000 over the guide price in an open house sale.”
In addition, sellers have one major chance to get their property show home ready. They can focus their effort. They don’t have to keep cleaning and tidying up for individual viewings often at short notice. This is a major practical advantage, especially for families with children.
The main problem, of course, is that some buyers may not be able to attend the open day. “It maybe that if we are very strict and say no viewing on any other day, we could be turning away purchasers who are prepared to give the asking price,” said Daniel.
The estate agent advises sellers who opt for an open house to consider occasional individual viewings for those who genuinely can’t attend because they are away, for instance.
“But you need to make anyone viewing the property before the open day is aware that it is still going ahead. Say you will put forward their offer to the vendor but the property won’t come off the market until after feedback from the weekend.”
Some potential purchasers may find open house viewings too pressured to take part. While others may put in a rushed bid only for it to fall through at a later date because its unaffordable. Meanwhile the best buyers who can meet the asking price may be put off by the free for all scramble and possible bidding war.
But Vicky doesn’t believe that offers from open house viewings have a greater dropout rate. She said: “We get that all the time. People make an offer and can’t get a mortgage. Even if we have an open day and receive multiple offers, we wouldn’t take a property off the market until solicitors are under instruction on both sides and they have a memorandum of sale.”
However nosy neighbours can be a disadvantage of an open house sale, she says. “When a board goes up advertising an open house you can guarantee that a few neighbours will ring up and want to make an appointment to look around. They are time wasters really.”
Security is another potential problem. “If it’s an owner-occupied property and four or five people turn up for the open house and shoot of in different directions, how is an estate agent going to look after the owner’s belongings? That’s why I don’t do them,” said Paul Preen, director of Lang, Town and Country estate agents.
Daniel agreed security is an issue. He said his estate agency only advertises the date of an open house and not the time, so people have to book an appointment to attend. “You don’t want people turning up out of the blue,” he said.
Do open houses work?
The market or at least the individual property needs to warrant an open day, say experts. Is there enough buyer interest to make it a success or could just one or two couples turn up? Does it show your property off to its best advantage?
“If we get a lot of interest in a property when it first goes on the market, I would always say we should consider an open house,” says Vicky, who added the pricing of the property is important. It needs to be attractive.
But Karen Mocko, of Patrick Williams Estate Agents in Reading, says the market has changed. “We don’t do open house viewings any more. The market is much tougher. It has changed from a sellers’ market to a buyers’ market.
“We also need to be very wary for the seller if the property had an open house and is still available for sale a week later, what message does that send the market? Nobody wants the house and let’s make a lower offer. I know I would.”
Paul said: “I’m not a fan. I feel individuals should have their own allotted time to get a feel for a property. There’s lots of psychology involved and people think open houses push people to make an offer, but the buying public don’t like them. They want their own time to view a property and ask questions.”
He added: “First impressions count. How can you show off a room at its best when it is full of 15 to 20 people. It’s impossible.”
Karen agreed, saying: “How can buyers imagine where they would put their furniture in a two or three-bedroom property crowded with people. At the end of the day, we are here to provide a service.”
Clearly open houses work for some but not others. There are many factors to take into consideration. A good estate agent should be able to advise if an open house viewing is the best way to sell your property.