Don’t fall victim to the OPEN HOUSE TRAP. Sellers and buyers beware, the real estate open house is not all show business marketing fanfare, glossy flyers, and free finger food. It’s the beginning of the negotiation on possibly your most valuable asset. Without being fully informed by your agent or even wandering in without representation at all, you could easily find yourself at a disadvantage.
An Open House is a predetermined period of time that promotes real estate sales by allowing interested parties to enter and inspect a property. The ultimate goal of the open house is to attract all buyers currently in the market for a particular type of home. To this end it can be an effective marketing tool, and may result in multiple offers within a narrow window of time.
When planned and executed effectively, an open house will attract not only buyers but real estate agents and brokers. It’s a huge advantage to a home seller to have multiple agents familiar with their home, especially when they have multiple buyers on standby waiting for the right property.
Hosting an open house can be expensive for agents. It’s not as simple as arriving 15 minutes before, hanging a yard sign and expecting a flood of open checkbooks.
To create the right buzz the marketing effort begins days in advance. Preparation and delivery of marketing material takes time and money. Digital promotion must connect with the Realtor® army, affiliated title companies and mortgage lenders. The neighbors must also be invited, as several of them may be persuaded to list their own property in the weeks immediately following the open house. The net is then cast wide open on the multi listing service for all agents, social media, major national real estate sites.
There’s a rhythm and flow to managing a successful open house, and if you nail it then your goals will be accomplished. You’ll also find out very quickly if you failed to get the word out effectively. The feedback is also instant and straight to the point. If you’re pricing is off or there’s problem with the house, you’ll know about it very quickly through unfiltered feedback.
There’s an allure to the open house concept for sellers. When your listing agent explains during their 15 minute presentation that they will hold X number of open house events to market your home, that alone may be enough to close the deal.
The reality is that while open houses aim to increase the profile of your property to the local market and your neighbors, they are a better tool for your agent to find buyer clients. A skillful open house can yield around four (4) client prospects for an experienced real estate agent.
When you’re selling your home and you choose a talented, professional, experienced Realtor® to represent your best interests, and they made a series of open houses key to their marketing presentation. You would expect them to host those open houses and put all that talent to work for you.
A seasoned, busy real estate agent may enlist the services of less experienced agent working under the same broker to host open houses on their behalf. This is not necessarily a negative, as new agents bring a lot of energy and enthusiasm. However, if you were counting on your agent of choice to negotiate during the event then you may be disappointed.
A seller might just roll with this and think nothing of it. Alternatively, it could leave you feeling like there’s been a breach of contract as you’re not getting what you were lead to believe was offered.
Buyers can also be gazumped when walking into an open house negotiation without being prepared.
The agent on duty (hosting) an open house, represents the seller. They have a fiduciary responsibility to their clients (sellers) which exceeds the duty of care they owe to any prospective buyer.
Clearly there is a conflict of interest, and the agent can not possibly serve both parties to a negotiation adequately and remain impartial. This is why it’s highly recommended that you only negotiate on real estate with licensed professional representation.
Sellers must ask the right questions before entering into representation agreements. If having your chosen agent personally host open house events is important to you, then include that in the service contract.
Buyers must also be aware that the agent in front of them at an open house, is not some universal being. The host has a primary duty of care to their clients interests, and a secondary duty to any prospective customer. The host agent will undoubtedly want to represent any walk-in customers, but if the house they’re in is not ideal then most certainly on another house and a different transaction.
An open house is a great way to meet, interview, and hire your Fairfax real estate agent.