Sell your house in just a few hours
With the potential to get bids over the asking price, open houses are ideal for sellers - but buyers need to be cautious.
Open houses are increasingly the way properties are sold and not just at the top end of the market or in prime London locations. On a good day, agents can arrange for as many as 90 people to view a property - though on average it's more like 30 to 40 – and then just sit back and wait for the offers to roll in. Open houses have achieved 5% above the asking price on average, according to research by haart estate agency.
Paul Smith, chief executive of haart, says: "This is definitely a trend that will continue to grow while the market is so buoyant. We held around 110 open houses a week across England at the beginning of the year and that had more than doubled to almost 300 open houses a week by mid-May. With lighter evenings, we are starting to hold them at 6pm and finding a lot of interest."
Open days are particularly good news for sellers with young families who find it difficult to keep their homes immaculately presented at all times. It allows people to showcase their home with minimal disturbance to family life.
Robert McLaughlin, regional sales director at Kinleigh Folkard & Hayward, says: "Open days do not suit everyone and all properties but if you know that demand will be high, it is a very effective way to generate a sale. Families with children and pets have found this arrangement to be really convenient, as have clients with a busy lifestyle.
"We have seen huge numbers of people making appointments to view our properties, with the highest recorded number for an open day currently standing at 92 viewings in three hours for a two-bedroom flat in West Hampstead.This generated an amazing 62 offers and a sale was agreed at 116% of the asking price.This is an exceptional result but it is not uncommon to have between 20 and 30 viewings arranged and for at least five to 10 offers to be generated."
By appointment only
Unlike the American system, it may be an ‘open house' but viewings are still technically ‘by appointment only' – you can't just walk in off the street without having first contacted the agent to get the property and open day details.That way, vendors can guard against would-be thieves and time wasters.
Lamont Wilson, residential sales manager in Connells' Emersons Green (Bristol) branch, says: "Open houses may conjure up the image of potential buyers freely walking around your home but this is not how we run them. We book people in for a designated time slot and register prospective buyers, so we know if they are serious buyers and not just coming for a speculative look around the house."
Another advantage to sellers and agents of the open house system is that they get an immediate response as to what the property is worth. Selling in the traditional way over a few weeks means that if a seller were to receive the asking price on day one, they'd have no idea if this would be the best offer they'd receive.
Ross Brien, manager of Hamptons International's Balham office in south-west London, says: "In today's property climate, you just can't expect a buyer to leave an offer on the table for the next two weeks while you see if anyone else is interested at a higher price.
"In Balham, we sell 95% of our properties with an open house. In the past two weeks, we have shown three open house properties, which have each drawn in between 25 and 42 buyers. All three properties sold for between 8% and 12.5% over their asking price – a key indication that the more buyers you show, the better chance you have of finding the best buyer at the best price."
Open days may be convenient for buyers in that they tend to be at weekends but it can make the market even more competitive.When you know you're up against as many as 30 people looking at the same property, it can lead to a feeling of panic.
"The fear for most buyers is that they know almost all open houses will end with ‘best and final offer' sealed bids," says Henry Sherwood of The Buying Agents. "A sealed bid on its own is not necessarily a situation to be afraid of but coupled with the open house it creates urgency and panic so buyers tend to behave irrationally, which usually results in someone paying too much."
Sherwood has this advice for buyers:"Ignore the fact it is an open house and just treat it like any other viewing. Don't listen to any figures or guidance from the agent and don't be afraid to talk to other buyers.
"If you think the agent may be exaggerating how much interest there is, turn up 20 minutes before your appointment and wait around for 20 minutes after.When it comes to offering, play your own game and don't try to second-guess what other people will go in at. If you have done your research, simply go in with a figure you are comfortable with to take the demand into account and leave it at that. If you are not successful, you can just walk away knowing you have done your best."
Matthew Turner who works on behalf of buyers at Astute Property Search, adds: "In my experience, you find some buyers will bid high having become over-enthused by the situation. Once they find out that they have won the bidding, buyers' remorse can set in.They may have friends telling them they have paid over the odds or they may even be still looking at other properties. Whatever the reason, you will see some buyers pull out after winning the bid."
Whether you're buying or selling, approach open days with caution and don't be distracted by gimmicks - all that matters is a fair price.
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