How Do Open Houses Work in Real Estate?
An open house is public event hosted by a home seller or listing agent where everyone and anyone is welcome to stop by to view the property for sale. An open house typically lasts for one to three hours and is advertised on the MLS, various property search websites and even local newspapers.
Are Open Houses Effective in NYC?
The real question is do open houses sell homes in NYC? Or are open houses mostly opportunities for listing agents to network and meet direct buyers?
The truth is, no matter how beneficial open houses can be from a networking perspective, they are downright effective in maximizing exposure to a listing. That’s because an open house is so much easier for buyers to pop into.
Buyers don’t have to contact a listing agent online and email back and forth to schedule an appointment. Instead, they can browse listings which have open houses posted and can decide to stop by if and when they want to.
If something comes up and they can’t make it, no big deal as they never committed to anything in the first place!
And as we know, anything that saves consumers and customers a step or time will almost guaranteed to be a hit. That’s why open houses are so effective in drawing more traffic to a listing.
As an additional benefit, buyer’s agents are more likely to send their buyers if an open house is posted. That’s because it saves them time from having to accompany the buyer to a private showing. It also saves the buyer’s agent precious time from having to schedule a showing on behalf of the client.
Often times, a buyer’s agent will email a listing agent to give them a head’s up that they will be sending their buyers to the open house. They may even attempt to register them by email by giving the buyers’ full names. Other times, a buyer’s agent will simply ask the listing agent if it’s okay to send the buyer unaccompanied because the buyer’s agent has a conflict. However, the question is more of a formality as buyers can always attend open houses by themselves in NYC!
Pro Tip: An additional benefit of posting an open house is that it acts as a signal to buyers that the property is still available. This is especially helpful for listings that have been on the market for a few months. If there is no activity on the listing and no open houses posted, a buyer may very well assume that you’ve already accepted an offer!
What Is an Open House by Appointment Only?
An open house by appointment only is a unique phenomenon that you’ll really only see in some NYC co-op buildings. An open house by appointment only means a listing agent is available at a certain block of time to show a property, but only if a buyer makes an appointment. If no one makes an appointment, the listing agent will not be there.
An open house by appointment only is posted on the MLS and various real estate websites the same way that a regular open house is. However, most NYC focused real estate websites will differentiate this type of open house by literally calling it an “open house by appointment only.”
Some larger buildings may have nice rooftops or other amenities such as gyms, in which case they may have experienced issues with random walk-in visitors to open houses who don’t leave after the open house and instead hang out in the common areas.
As a result, some buildings have imposed rules disallowing public open houses, and instead requiring all open houses to be by appointment only. Other buildings go a step further by requiring two agents to be present for all open houses. One agent to stay in the apartment and a second agent to escort visitors to and from the building’s entrance. Some co-op buildings are so strict that they prohibit open houses altogether, even open houses by appointment only!
Pro Tip: Should buyers reach out to a listing agent directly and agree to dual agency in NYC? Is there an advantage to not having a buyer’s agent in NYC? Read our article to learn more about the pros and cons of working with a buyer’s agent in New York City’s complex real estate market.
What Is a Broker Open House?
A broker open house is a private event posted only on the MLS and visible only to broker members of the MLS. A broker open house functions the same way as a regular open house, with the exception that the event is not publicly posted and the target audience is the brokerage community.
Broker open houses are typically posted during times of the week where direct buyer showings are infrequent and brokers have free time. For example, a listing agent might try to lure buyers’ agents to preview his or her listing by offering a free sushi lunch at her Tuesday 11am broker open house.
Sometimes listing agents will contact other listing agents with similar properties for sale in the neighborhood to organize a broker open house tour. The listing agents will typically organize by email and all post broker only open houses at the same time.
It is unclear how effective or useful broker open houses are and whether they help sell homes in NYC. Our partner brokers generally believe that if you’re going to participate in a broker open house tour, you might as well set your open house as a public open house. Why decline the option value of any potential walk-in direct buyers?
Furthermore, it’s unclear how many agents these days spend their free time touring random properties for potential future buyer clients. That’s because everything is done online these days, and buyers often search by themselves online and send links to listings they like to their agent. Gone are the days where a buyer’s agent is the sole repository of knowledge on various listings for sale in the city.
Pro Tip: What’s the difference between a listing agent vs selling agent in NYC? And once my listing agent finds me a buyer, what is the time between offer and closing in NYC? Read more to learn more!
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Disclosure: Hauseit (https://www.hauseit.com) and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction. The services marketed on Hauseit.com are provided by licensed real estate brokers and other third party professional service providers. Hauseit LLC is not a licensed real estate broker nor a member of any multiple listing service (MLS).