The pros and cons of holding an open house
The words "open house" plastered on a sign or shingle don't attract the same number of prospective buyers they did 10 years ago. These days, many serious buyers prefer the virtual open houses of craigslist, MLSLI.com ... well, name your favorite Web site for house-hunting.
"Before the Internet, open houses were hugely effective," says Peggy Moriarty, associate broker at Daniel Gale Sotheby's International Realty in Cold Spring Harbor. "People used to come into my office and say, 'I'm looking for a three-bedroom home in Cold Spring Harbor for so many dollars. And they went blind. . . . Then the Internet came about, and it's totally amazing how it's transformed our business. Now people use the Internet as their open house every day."
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Not that it keeps agents from doing business the old-fashioned way, especially when many sellers still ask their agents to hold an open house. "Sellers still think things are like they used to be," says Seth Pitlake, a licensed sales associate with Prudential Douglas Elliman Real Estate in Merrick.
For agents like Jamie Winkler, owner of Winkler Real Estate in Islip and West Islip and co-owner of the Long Island edition of The Real Estate Report (lirealestate report.com), a company that reports on local real estate transactions, open houses are still a great way to bond with potential buyers.
"They can only help you and never hurt," she says. "Because there are so many houses on the market, a lot of buyers prefer to visit open houses rather than go to many different brokers. It's good for the buyers and for the agents. This way they can see who they connect with. The worst thing is that you get an agent who has to sit there for three hours and gets no deal. So they're bored, but there's nothing more negative than that."
But some brokers did manage to come up with a few negatives - security issues, nosy neighbors and lack of serious bids, to name a few.
But do the pros outweigh the cons?
Open to all
It's not just prospective buyers who come to an open house, but also brokers who might want to team up on the sale and usually provide advice on ways to help a home sell faster.
"A lot of the smaller brokers may not have a lot of inventory to capture buyers, so this way they have someone to work with," Pitlake says.
Moriarty agrees. "There are three people you sell a house to - first the broker community, second is the buyer community and third is the bank. Unless you can sell to all three people, you're never going to sell that house."
The chances of a serious bid may be slim, but an open house usually will draw people, particularly if the house is priced right.
"Pricing has to be very sharp in today's market, anyway. If you have a new property and you're putting it out with an open house for the first time, you should check all of the comparable homes in the area," Pitlake says. "If your price point is 5 percent under the comparables, you'll take all of those customers away from the competition."
The Web may be the fastest way to find a home, but nothing beats actually walking through a house and seeing it firsthand, say some agents.
"Looking on the Internet, you don't see how the light comes through the kitchen or how the patina on the molding looks," Moriarty says. "If I was a really serious buyer, I'd be looking at every single house in my price range in the area. A lot of people don't want to make appointments with a Realtor. They like the advantage of just going to an open house."
Finding new customers
Open houses are often the place where a potential buyer can wander in from the street.
"Yes, you get the nosy neighbors who drop in, but it's amazing how many people move to another house in their own neighborhood, so these are also potential customers," says Regina Koller, communications and community relations coordinator for Coldwell Banker Residential Brokerage in Hauppauge.
Rarely produces a bid
What brokers seem to agree on is that open houses aren't a great tool for selling a particular home.
"I've been selling real estate for about 10 years. I think I sold one home through an open house," says Dallas Moore, a broker at Happy Homes Realty in Middle Island. "An open house works more for the agent, as far as generating new buyer leads. They don't necessarily help the homeowner, but [very often] the buyers who come to an open house usually buy another property from that broker."
Hosting an open house has always been a magnet for attracting curious neighbors -- just don't expect them to be friendly with an offer.
"You always get the nosy neighbors down the block or the bicycle rider or the people walking the dog or their baby down the street," Pitlake says. "That's just an outcome of having an open house. People are always interested in what's going on next door."
Having an open house is basically an open invitation for anyone to enter your home, so hide the valuables and breakables. Last year, two Hamptons women pulled a string of thefts at open houses in Manhattan, slipping everything from a Tiffany clock to a bottle of Champagne into a large handbag. Many brokers now require potential buyers to show a form of identification or sign in before getting to look at a house.
Too much stress
With the housing market so tight these days, first impressions are more critical than ever. Hosting an open house is just one more thing to drive a seller crazy.
"Sellers are always concerned about buyer response and what impression they're making," says Mark Malsky, a broker for RE/MAX Signature Real Estate in Babylon and East Setauket. "Buyers can limit stress by limiting the number of open houses they have. ...
Holding the same open house over and over again can send out the wrong message -- that there's something wrong with the house. Open houses should be held when they're most advantageous to the seller."