Holding an open house is advertised as an important step in the home selling process. The moment you hire a real estate agent, he or she will start explaining to you several advantages of this practice and urge you to follow the conventional wisdom. However, there are some drawbacks of an open house and several studies suggest that they hardly result in sales. According to a study conducted by the National Association of Realtors – only 2 percent of the homes are sold due to an open house. This begs the question – should home sellers invest time and money on holding an open house? The quick answer is, no, they don’t need to.
Housing markets in the U.S. are now very competitive. In some markets, homes are selling within seven days of being listed and above the asking price.
Here are some drawbacks of an open house.
Real estate agents claim that an open house increases competition among potential buyers – leading to a higher sales price, but studies suggests the contrary. According to a survey conducted by a popular real estate listing company, only 16% of homes that hold an open house sold above the asking price. On the other hand, 26% of homes that didn’t, sold above the asking price.
Many people are in the market just to test the waters. They are not financially prepared to buy a home, but they may visit your open house and start negotiations. When you are juggling with so many obligations, these people can waste a great amount of your valuable time and can even distract you from considering offers from more serious buyers.
An open house makes physical presence of the prospective buyers necessary to view the property. The buyers will have to take time out of their schedules to visit the open house, but there are more effective marketing solutions available today in this age of technology. You can offer virtual tours and reach out to a larger pool of potential buyers. It won’t require their physical presence and they can take a tour of your home anytime and from anywhere they want.
Each time you hold an open house, you have to spend money on cleaning and staging the home. You need to then market the open house schedule so that potential buyers are aware of the date and time. If you can’t sell your home even after holding open houses several times, it will bring bad reputation as potential buyers will start suspecting there is something wrong with the property.
These are some of the drawbacks of an open house. There is no denying the fact that an open house can help you sell the home in some cases. But there are more cost-effective and efficient ways of marketing your property.