Open Houses: Are They A Good Idea?

Not all agents encourage sellers to have open houses. Open Houses allow the public to visit a home for sale at a scheduled time without an appointment.

Do I think it is a good idea? Well, that depends. If your home is in a luxury price range that very few buyers can afford, an open house will likely attract more voyeurs than buyers. They may just want to check out what a home in that price range looks like. Also, if your home is in a low traffic area and off the beaten track, it is unlikely to attract many visitors, in which case an open house may not be worth the effort or inconvenience.

For the more typical suburban home, in areas such as Washington Crossing, Newtown and Yardley, an open house can be beneficial.

Few homes are actually sold at open houses. I’ve done it, but it is rare. What I do find, however, is that buyers who are considering a house, and have seen it with an agent, will visit an open house to more thoroughly examine it. They may have questions that a listing agent can easily answer, but would have gone unanswered if they did not drop in. I have had many visitors to open houses wind up being the buyers of that house. Would they have bought it anyway? Perhaps, but maybe not.

I have also worked with buyers who live locally and want to move up to their dream house. They are loyal to me as their agent, but are very particular and become apologetic about the number of homes they ask me to show them. If they can view a property at an open house, they prefer to do so. If an open house is not scheduled for a home they wish to view, they will call me to show it to them. Would they make an appointment and eventually view the property, anyway? If it doesn’t sell quickly, they probably would view it eventually, but their ability to view it sooner, rather than later, might result in a higher sale price for the sellers.

One reason some agents give for discouraging open houses is that open houses allow people who have not been approved for mortgages to view the home. While this is true, there are not many people who so enjoy viewing homes that they do so as entertainment. Most open house visitors have some interest in homes in the area and price range they visit or they wouldn’t bother. Also, some buyers have demanding jobs and cannot look at homes during the work week. They like the low pressure opportunity to visit homes on a Sunday without an appointment. As far as security is concerned, small objects of value should be safely hidden during open houses and during any home showings.

An open house hosted by the listing agent is most desirable because the listing agent’s primary interest is to sell that house. A listing agent should know a lot about the house and be in the best position to present it positively. If at all possible, sellers should request that their listing agent host open houses themselves rather than having another agent do it. Agents, other than the listing agent, may volunteer to hold an open house for a listing agent in order to possibly sell that house. If the buyers are not interested in that house the non listing agent may have the additional opportunity to sell the buyers another property. A non listing agent does not have as great a motivation to sell your home as does a listing agent, and does not have as great a knowledge of your property. Therefore, the listing agent is your best representative at an open house.

Attractive homes in attractive neighborhoods will sell during a strong real estate market, and an agent will not have to use all the tools available to him or her to sell your house. Attractive photographs, a for sale sign and posting the property on the MLS (Multiple Listing Service.) may be all that is necessary.

If the market isn’t particularly strong, and there are a number of other homes a buyer can choose from, agents should offer sellers all the tools available to them and holding open houses is one of them. Unless sellers are uncomfortable with open houses, or will be significantly inconveniences by them, why not utilize this tool to sell your home? Homes generally sell faster and for more money if there is competition in the market. The more people who view a home, the more likely it will sell quickly and for top dollar.

Tips for Home Sellers

The best advice I can give sellers is to price their home right, declutter and leave the house during showings.

Home Pricing

Many sellers either overvalue their homes or believe they need to inflate the listing price in order to allow room for negotiations.

The eventual sale price of a home will be based on what a buyer is willing to pay for it; and, buyers these days are very knowledgeable. From internet sources, buyers have access an abundance of information about the prices of comparable homes and those that have recently sold. They may also look at many homes before making an offer. It is unlikely that they will significantly overpay for a home. Even if they inadvertently agreed to do so, buyers who require a mortgage to pay for the house, may not be able to purchase the property if the lender's appraisal comes in lower than the sale price.

When discussing listing prices with sellers, I have sometimes been told that if a buyer wants to pay significantly less than the listing price for a home, the buyer should make an offer. This may seem logical, but our culture does not require us to actively bargain for many things and most Americans are uncomfortable making low offers for homes. They either think it's a waste of time, they don't want to insult the seller, or they think the seller will be difficult to deal with.

A realistically priced home attracts more buyers and more offers than an overpriced home.

If you are unsure of the proper price for your home after your realtor shows you information on comparable sales, ask your realtor if he or she will show you homes similar to yours that are currently on the market. That way you will get a better feel for home values and the competition.

There are some homes that are difficult to price. Older, historic homes or unique, high end, custom homes sometimes fall into this category. In these situations, it might be wise to have an appraiser value the home.

Decluttering

A home should be spotlessly clean and decluttered to show well.

Some sellers are touchy when the subject of decluttering or staging is introduced. The clutter may include items they regularly use, or may include lovingly collected items. Unfortunately, these items may be distractions for buyers who need to be able to focus on the features of a home in order to evaluate it properly. Too much stuff prevents them from doing so. If they can't connect with the property and envision themselves living in it, they will generally continue shopping.

Staying in The House During Showings

I realize that in some situations it is difficult for the seller to leave the home during showings. Elderly people or parents with a napping infant cannot always jump in a car or take a walk around the neighborhood. However, if possible, sellers should vacate the property during showings.

Buyers need to be able to envision themselves in a home. If they see you there, it is an obstacle for them to do so. They may feel like they are intruding and may hesitate to open doors and cabinets to thoroughly examine the property.

Buyers should also be free to express their likes and dislikes to their agents and may not do so if you are there. Their agents can sometimes answer questions or overcome their objections. Your presence interferes with them doing so.

Conclusion

These suggestions are basic and there are many more tips of the trade a good realtor can suggest. A listing agent should work with you to assure that your home looks its' best in person and on the internet.

Selling a Home in Bucks County

At a recent office meeting, we discussed the current state of our local real estate market.

Articles in our local newspapers cover the national market and are reporting significant price increases in many parts of the country.  During the real estate bust, areas such as California, Florida and Arizona had price decreases of 50%. Those areas are now recovering and home prices in these areas have increased significantly when compared to their recent lows.

Bucks County did not experience the extreme speculation in housing that occurred in some areas of the country.  On average, home prices in Bucks County decreased by about 15-18%.  Older homes and luxury homes decreased more significantly.

Homes in Bucks County are now selling faster than they have in the past few years and, buyers, who were spoiled by an unusually high number of homes on the market, are now complaining that there aren't enough homes to choose from.

In many cases, sellers are concluding that they can ask considerably higher prices for their properties than their realtors are suggesting.  This is not the case.

I've heard projections from knowledgeable sources that local prices in the next few years are likely to appreciate from 1-3%.  Sellers who cite national statistics are often misguided.  We did not have the severe market appreciation or decline experienced by many areas of the country; so, we can't expect prices to increase as significantly as in other areas. 

Buyers are acutely aware of the recent bubble and bust in the housing market and that prices are not guaranteed to increase. A wealth of information is available on the Internet and buyers are reviewing it.  Buyers are comparing properties and have a good understanding of real estate values.  They are cautious and unlikely to overpay for a property. 

Occasionally, a relatively high price will be agreed upon by a buyer and seller.  If a mortgage is involved, the property will have to be appraised.  Because of past problems resulting from loose lending practices, lenders are being cautious and appraisers are being conservative.  An above market sale price is likely to become an issue when the appraised value is determined to be less than the agreed upon price.

The keys to selling a property in our current market are:

• Pricing
• Condition
• Marketing

Your realtor may do a great job of marketing, but if the price is unrealistic, your home is unlikely to sell. If the condition is not ideal, sellers cannot expect top dollar for their homes and the price should be adjusted accordingly.