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Home Truths May 2012

Are Open Homes dodgy?

So reads the headline in an article published in the New Zealand Herald property section on 5 April 2012.

In case you didn’t see it, the article, by  Shelley Bridgeman, mentions well-known problems in connection with open homes and offers a handful of opinions from those who have either been affected by open homes or, in one case, someone not now in the industry.

Sticky-beak neighbours, tyre-kickers with nothing better to do and those simply looking for decorating ideas are all mentioned as those who visit open homes. What isn’t given a mention and should have been, is that all of these visitors will be accorded the status of ‘buyers’ and mentioned in reports to the sellers, even though the majority of them have absolutely no intention of buying that property – or any other property for that matter.

But, as the article continues - time-wasters such as those above, are the least of a home-seller’s problems. Open homes have been identified with providing an opportunity for thieves to identify items worth stealing if not at the time, then at some later date. They are also able to check-out the security arrangements – location of motion detectors etcetera. How very useful! Some years ago, before we stopped conducting open homes, I have had to lock doors and windows that had been unlocked by visitors to the home.

As you would expect, there are numerous on-line responses to the article. Most are anti open homes but there is a scattering of pro open home comments – but only from real estate salespeople, pouring out the usual industry ‘reasons’ about the benefits of open homes.

It was refreshing, therefore, to see in the article, comments from three real estate agents (as opposed to real estate salespeople), that they considered that open homes were not really in the best interests of the home sellers. They gave as their opinion that open homes were of greater benefit to the agency than the home seller.

To that, I would add a hearty ‘hear, hear!’ 

Other problems from open homes are seen as too many people in a room , and especially in hallways, making a house seem too cramped, and adverse comments from those not interested in purchasing, dissuading someone who is interested – with the result loss of a possible sale.

Additionally, quite apart from the possibility of theft, there is the likelihood that the ‘wrong’ buyer will see the property – and want to buy it. The ‘wrong’ buyer, because for them it is not really affordable and therefore the likely offer price will be a lot lower than it should be. To this, add one commission-only salesperson who hasn’t made a sale for some time, and there is the potential for a sale at a level that is lower than it could have been.

We truly believe that the only people to be shown a property should be those who want to purchase a property in that area and who are able to afford it without excessive borrowing. We do not agree with what appears to be a common practice of showing properties that are too expensive for the buyers with the hope that ‘if they like it they will come up with the money somehow’.
 
This practice is unlikely to achieve the best price for the seller. After all – it is the seller who is relying on the agency to achieve the best price for them. There is no sense in using any methods that are likely to damage that price.

In light of the above, it has been interesting to receive, over the years, feed-back from our salespeople to the effect that some buyers preferred to buy property that ‘half the neighbourhood hadn’t seen at an open home’.