7 Things to Know BEFORE Holding an Open House in Real Estate
November 17th, 2023
Holding an Open House
What is an Open House in Real Estate? Here are seven things you need to know, as well as the pros and cons, before holding an open house!
In real estate, an open house is an event where prospective buyers can tour a home listed for sale. Open houses are typically held on weekends (when many buyers do not work and have time to tour homes), although they can also be held during the week.
The seller's listing agent usually holds open houses, though successful Real Estate Agents typically have a team of folks, and a team member usually will offer to hold the home open. This is because it's a great way for the team member to build their book of business by interacting with prospective buyers.
They are theoretically using your home as a storefront to grow their business. If the seller is not working with an agent, the seller may hold the open house. Realtors and homeowners typically offer something to entice potential buyers to tour the home, such as a giveaway, food, or drinks.
1. Pros and Cons of Open Houses in Real Estate
The pros and cons of open houses in real estate will vary depending on whether you're a buyer or a seller:
Open House Pros if You're a Buyer
No scheduling appointments are necessary. An open house does not require an appointment, so the buyer can show up during the open house timeframe and view the home. This is different than a private showing, which involves setting up an actual appointment to tour the home and getting approval from the seller/seller's agent that the appointment time will work with their schedule.
Potential home buyers can walk through the home. Determining whether you like a house after physically visiting it is much easier. Attending an open house allows one to understand better bedroom dimensions, floorplan layout, backyard size, and more. We strongly encourage our clients to attend open houses as their buyer's agent, and if it's something they are interested in, we will schedule a private showing to go through all of the details before submitting an offer.
Open House Cons if You're a Buyer
Open houses can be hectic. When viewing a home, you want to take your time carefully walking through each room, assessing any potential work that needs to be completed, and ensuring adequate space for your needs. Depending on the home, some open houses can attract many prospective buyers, causing distractions when visiting the home. Giving yourself the time to assess whether or not you want to move forward with a home while surrounded by a sea of competing buyers may make it a challenge to make a clear decision.
Attending several open houses in a day may cause unnecessary stress. Hopping from one open house to the next can be extremely exhausting, making the house-hunting experience far less enjoyable than it should be. It is best to schedule two or three private showings in a row and give yourself ample time to tour each one rather than running from one open house to the next within a tight timeframe.
Open House Pros if You're a Seller
Increased exposure. Before holding an open house, a Realtor typically advertises the open house as much as possible via social media, print/digital ads, street signs, etc. This increases your home's marketing exposure and helps spread the word about the listing.
Open houses can also attract a wide range of buyers, giving your listing more visibility among prospective purchasers. However, it is important to note that this same level of marketing and exposure can be done for the listing even if there isn't an open house.
Open House Cons if You're a Seller
Open house attendees may not be qualified buyers and are just “browsing.” Anyone can attend an open house – attendees don't typically need to register or have mortgage pre-approval or prequalification before attending. For that reason, many attendees may be nosy neighbors or individuals who are not very serious about their home search – they are just browsing homes to get a feel for the market.
There is a low chance of home selling from an open house. Most clients have sold their homes through private showings rather than open houses. This is primarily because I can check to ensure that the potential buyer has been pre-approved for a mortgage before attending a private showing. In doing so, I know that the buyer most likely has the funds available to buy a home, and there is a higher likelihood that they will be approved for a loan. This helps save both the buyer and the seller's time.
There can be an increased risk of security issues and break-ins. Even if you live in an extremely safe neighborhood, vandalization is unfortunate. Open houses allow criminals to enter your home with limited supervision and map out a plan for theft. This also applies to vacant homes, as thieves can steal appliances, copper plumbing, lighting fixtures, and other items left in the home.
2. Should I Have an Open House When Selling My Home?
Although there are pros and cons to open houses for both buyers and sellers, I typically caution my clients against holding open houses due to the low likelihood that they will procure a buyer.
Instead, I prefer to market my client's listings heavily and hold private showings to ensure the prospective buyer has been pre-approved for a mortgage. After all, you wouldn't want individuals walking through your home if they can't afford to buy it, right? Private showings are one of the ways to prevent that.
3. Do Open Houses Sell Homes in 2023?
This year continues to bring technological advances within the real estate sector, making it easier for buyers to shop for homes online. With the rise in virtual reality, high-resolution photography, advanced videography, and interactive floorplans, prospective buyers have fewer reasons to attend an open house than ever.
Knowing that open houses will become even less relevant in this new decade, buyers will spend more time looking at homes on their smartphones, tablets, or computers to waste less time attending one open house after another. The new millennial buyers will research homes online, viewing the videos, photos, etc., before touring the home to ensure they are serious about it. For those reasons, open houses will become less relevant as we strengthen our digital reach in 2023 and beyond.
4. Are Open Houses Worth it for Realtors?
Realtors who prefer to work with buyers may benefit from an open house because it allows them to network with buyers who aren't working with a Realtor. These potential buyers may be early in shopping for homes and not know a thing about the North Carolina Home Buying Process. However, this is not always beneficial to you as the seller.
Here's why: if your Realtor is focused on finding new clients while hosting your open house, they may be distracted and not as focused on speaking with buyers interested in buying your home. Although this is, of course, not always the case, it is a possibility that sellers should be aware of when determining whether or not to hold an open house.
5. Are Open Houses Worth it for Sellers?
Open houses may waste sellers' time, energy, and money. Before hosting an open house, you will want to ensure your home is in tip-top shape. This may mean you will be stuck cleaning your home for hours leading up to the open house or may spend money on a cleaning company to organize your house. Of course, cleaning your home is unavoidable when listing it for sale, as you want to ensure it is always clean and organized for private showings.
How disappointing would it be to spend hours cleaning your home or spend hundreds of dollars on a cleaning service, only to have one buyer show up to your open house who can't even afford the home in the first place? It is far better to devote time, energy, and funds to private showings, as those appointments are more likely to procure a buyer.
To attract buyers to an open house, agents may convince sellers to purchase food, drinks, or entertainment to entice attendees. Although this may help bring in more buyers, it can also bring in individuals just looking for a free meal. Although some agents may offer to pay for catering or entertainment, this more commonly comes from the seller's pocket and can be a waste of money.
In addition to spending much-needed funds on open houses, the seller cannot be home during an open house, meaning you are responsible for getting the kids, pets, and relatives out of the house for several hours on a weekend. Finding an activity for your whole family, including pets, for two to three hours on a Sunday afternoon can pose quite a challenge and will prove particularly frustrating if only one disinterested buyer or a nosy neighbor shows up to the open house (or no one at all).
6. Are Open Houses Safe?
When a seller opens their home to be viewed by the public, there is always a possibility that unsuspected criminals may enter as well. With the prevalence of home security systems and hidden cameras, this is not quite as common as it may have been 10 or 20 years ago, but sellers should still take some precautions when hosting an open house. Here are some tips to help protect against theft when holding an open house:
Ask Neighbors You Trust to Keep an Eye On Your Home
If you have neighbors you trust, ask them to attend your open house or keep an eye on your home during the time when the open house is scheduled. If they notice any suspicious activity, they can alert you right away.
Remove All Valuables
If you own expensive jewelry, artwork, or other items that can easily be picked up, remove them from your home or put them in a safe.
Have All Attendees Sign In
Ask your Realtor to have a registration sheet available and require that all attendees sign in with their contact information. If you anticipate many attendees at your open house, ask your Realtor to bring a second agent or assistant to ensure no one skips the sign-in process.
7. Frequently Asked Questions about Open Houses in Real Estate
What is the Purpose of an Open House?
The ultimate goal of an open house is to secure a buyer for the home. An open house allows prospective buyers to tour the property at their leisure, either independently or guided by a Realtor.
Are Open Houses Effective?
Many years ago, before the age of digital technology, buyers had limited ways of seeing a home besides attending an open house or a private showing. Prospective buyers would review ads for homes on the market in the newspaper or drive around on a Sunday afternoon looking for open house signs.
However, buyers now have various methods of digitally touring the home, making open houses less effective than they once were. If a buyer is interested in offering your home, they will set up a private showing request, giving them a quiet, non-chaotic environment to walk through the home and make an offer carefully.
How do you Prepare for an Open House?
Try eliminating as many personal items as possible when preparing for an open house. The less cluttered your home is, the more open and spacious it will appear – which is an important factor for most home buyers.
If possible, try to store as many items as possible. Removing personal items, such as family photos, toiletries, etc, is also advised. When a prospective buyer walks through a home, they try to envision themselves living in it. Seeing your family photos or personal items throughout the home will make it harder for them to picture the home as their own.
Do You Need a Realtor to Attend an Open House?
If you are selling your house on your own without the help of a Realtor, it is not required to have a Realtor at your open house. If you sell your home through a Realtor, they will be present during the open house timeframe. In nearly all situations, sellers are not advised to be present during an open house, so you will most likely need to make plans during the time when the open house is scheduled.
If you are a buyer who is working with a Realtor, it is strongly advised to attend the open house with your agent, as they can guide you through the home, answer questions, and assist in drawing up paperwork in the event you choose to make an offer on the home. If you are not working with a Realtor, you can attend the open house independently – a Realtor is not required.
What Percentage of Open Houses Sell Homes?
There aren't metrics stating what percentage of home sales are directly tied to an open house, but Realtors tend to be somewhat divided. Some believe open houses are effective, while others believe there are far more effective ways to attract buyers.
Why Do Realtors Have Open Houses?
A Realtor will hold an open house with the ultimate intent of finding a buyer for your home. However, some Realtors may also host open houses to market themselves and their businesses.
There is nothing technically wrong with this, as Realtors should actively seek new business, but this may distract the Realtor from speaking with prospective new clients and be less focused on the buyers who may want to buy your home. This is not always the case, but open houses pose the perfect opportunity for Realtors to network with prospective buyers who are not working with a Realtor.
Although an open house certainly will not hurt your chances of selling a home, there are other methods that may prove to be less time consuming and more cost-effective when selling a home. The statistics show holding an open house is unlikely to sell your home.
Every market is different, but I have always provided my clients with the pros and cons of holding open houses here in North Carolina, as private showings tend to be a more effective method when procuring ready, willing, and able buyers who have mortgage pre-approval and can afford to buy a home.
Hi there! Nice to 'meet' you and thanks for visiting our Raleigh Real Estate Blog! My name is Ryan Fitzgerald, and I'm a REALTOR® in Raleigh-Durham, NC, the owner of Raleigh Realty. I work alongside some of the best Realtors in Raleigh. You can find more of my real estate content on Forbes, Wall Street Journal, U.S. News and more. Realtor Magazine named me a top 30 under 30 Realtor in the country (it was a long time ago haha). Any way, that's enough about me. I'd love to learn more about you if you'd like to connect with me on Facebook and Instagram or connect with our team at Raleigh Realty. Looking forward to connecting!