Open houses – Are they worthwhile?

Open houses and their worth has caused some debate among estate agents over the years. While some don’t see the significance or need, others see open houses as an intricate and necessary part of marketing a home successfully and achieving the best possible outcome.

It is interesting to note research shows that often open houses have generated more leads than the online listing. There have been a number of occasions where a property has been sold from a lead generated at an open house – a lead that would have been missed if the home was merely listed online. What does this say? Rather than doing away with traditional home selling methods and purely focusing on the online platforms, it would be advantageous to both the agent and the seller to integrate elements such as open houses into their marketing plan. Using a variety of platforms will increase the home’s exposure to a greater audience, which will result in the optimum outcome.

Some of the advantages of having an open house are visibility and accessibility. It is also possible for open houses to save both the agent and the seller some time, as numerous prospective buyers can view the property on the same day. Regardless of which brand is represented by the sign outside the property, buyers will stop in at an open house to see what is on offer if they are interested in buying a property in that area. Another positive aspect is the fact that buyers have the opportunity to personally interact with the agent and ask them any questions they may have regarding the property. The interaction will also open up the chance for the buyer to be put on the agent’s database or make appointments to see other homes within their portfolio of stock.

In certain instances, open houses can be less stressful than a view by appointment strategy. This is because the cleaning and tidying are only done once a week, rather than numerous times to accommodate the potential multiple viewings in the course of the working week. The seller is also not inconvenienced by constantly needing to be home at a certain time or wait around to let in buyers who want to view the property.  An open house can sometimes be easier from a logistical point of view.

When it comes to formulating the statistical success rate of open houses, it is very difficult because there is different feedback depending on the area and type of property. Every neighbourhood has a unique demographic and dynamics, which emphasises the importance of working with an agent who understands the micro market. Certain agents say that the majority of their sales come from buyers who viewed the home during an open house, while others have not sold a property using this method for quite some time. It largely depends on the area and what works there.

Other simple but effective methods of marketing a property are ‘For Sale’ boards, flyers and print advertisements. Many agents have also embraced the marketing power of social media networks to enhance their connectivity to buyers in the market.

Irrespective of the method used to sell a home, it is vital that sellers use a reputable agent who has working experience in their area. The right agent will find an effective method to successfully sell the home for the best possible price and within a reasonable timeframe.

What agents do behind the scenes

What most people may not realise is that for every hour that an estate agent spends with a seller, they will spend approximately nine hours working behind the scenes on the homeowner’s behalf to get the property sold.

If an estate agent works on a no sale, no fee basis, they will only get paid after the home has been sold. While a risk, working on commission pushes agents to do what is necessary to see the deal through to fruition. In other industries, professionals will charge their clients an hourly rate for the time they spend working for them. However, agents don’t, which means they run the risk of coming away empty-handed or worse – out of pocket. Agents will often spend their own money and resources to market a property, money they will not get back unless the home is successfully sold.

There is often discussion regarding why certain agents charge more, while others charge less. As with most services, it is based on experience and the value offered to the client. If the agent can deliver on the key performance indicators set out from the start, they should be paid accordingly.

So what do estate agents do behind the scenes?

Market the property
It is vital that the property is exposed to the right target market of potential buyers. To get exposure, agents will advertise their listings on property search portals such as Rightmove, Zoopla and OnTheMarket, as well as in magazines, newspapers, flyers, and brochures. Part of the process of setting up the adverts is having photos taken of the home and having the layout professionally designed. Other marketing tactics include using the services of a public relations officer to engage with targeted media, posting listings on social media, arranging and hosting open houses and facilitating private viewings.

Qualify buyers and negotiate offers
Agents are professional negotiators. A lot of their time is spent talking to their network and ensuring that buyers are matched with the right homes. The agent needs to have an in-depth knowledge of the homes that they are currently marketing, along with what each of the buyers in their network wants.

When a buyer has found a home that meets their criteria, the agent will guide the buyer through the process of making an offer. They will also facilitate any counter offers from the seller – a vital aspect of the property sale, as the agent can net the seller thousands during this stage of negotiations.

Research the market
Knowledge of the property market and specific area information is a vital arrow in an agent’s quiver. A substantial amount of an agent’s time is dedicated to researching property sales prices and data to ensure that they know their area well and have a good handle on the market.

Correctly pricing a home is a valuable skill. To do so, an agent needs an understanding of the economic environment and their target market, which takes time and research. To accurately pinpoint the right price to list a home, an agent will need to complete a comparative market analysis (CMA). Factors taken into consideration during a CMA would include the average price per square metre in the area, recent sale prices of similar homes and comparative prices of other properties that are still on the market. This information will help establish a reasonable price range for the property.

Ensure a smooth ride
The fact is not every property transaction will go according to plan. However, agents will try to shield their clients from any unnecessary drama – unless there is a need to inform them. An agent will work tirelessly to ensure that the property sales process is as hassle-free as possible for all parties involved.

Selling a home can be stressful, and emotions often run high. A good agent will need to be a problem-solver, keep a positive approach and come up with a constructive solution to any issue.

Network with other agents
Networking is an intricate part of being an agent. Most agents will have a network of other real estate professionals that they will use to find a suitable buyer for a home. Agents often spend time helping each other to match the right buyer with the right home. In certain instances, agents will refer buyers to other agents if they know that agent has the house that checks every box on their wish list.

A good agent will add value to the property transaction and earn their keep.