Open Houses Puzzle British Home Buyers
Obviously written for a British audience, the article cracked me up with lines such as: "To succeed, the practice needs a pro-active realtor or vendor to whip up enthusiasm among prospective purchasers, who all inspect the property at the same time and – spurred on by rubbing shoulders with rival buyers – are encouraged to make above-market offers to make sure the home does not slip from their grasp."
Apparently, they don't hold open houses in the U.K. -- ever.
But why not? The Sunday open house is an American tradition, the first stop for many tentative home buyers on the way to making a real bid.
Should the lack of the practice in England make home buyers in this country reconsider their value?
Probably not. Still, it's hard to believe that Brits haven't wised up to this U.S. practice. So I called our babysitter Jessica, who arrived here from Northern England a few years ago, and asked her why Brits don't hold open houses. Her response: "What's an open house?"
What have the Brits been doing all this time? Making appointments, of course.
Apparently homes in the U.K. are shown the old-fashioned way, by real estate agents with keys who bring prospective sellers to a property during weekdays (and sometimes weekends). That's a culture, of course, where people actually get time off from work during the week to pursue their personal lives.
Here in the U.S., where more than 6 million homes are sold each year, open houses are billed as a priceless tool that helps sellers draw in maximum foot traffic in minimal time, while giving buyers a way to research the market without having to rely on a broker. It's a very American way of democratizing the hunt for shelter.
But do open houses actually work? There seems to be a consensus that they don't do much for the seller, except in cities such as New York, where foot traffic is high. One New York broker says she garners 50 percent to 60 percent of her sales through open houses. Brokers in other cities around the country say open houses generate less than 10 percent of their business.
But prospective buyers generally love them. The National Association of Realtors doesn't measure precisely which homes are sold through open houses, but spokesman Walter Molony offers this interesting detail: 12 percent of home buyers first learned about their home through yard signs or open houses.
And in a challenging market such as the current one, sellers need every chance to hook a buyer that they can get. So if you enjoy attending open houses, more power to you. The information you gather can help you shape a more educated bid once you're ready to buy -- or at least build your confidence.
A psychologist named John Mahoney quoted in the FT piece offered insight on what makes open houses work, at least in theory: "It creates an atmosphere where a person falls in love with a home and then that feeling is ruptured when the buyer realises there are others who can deny them their dream. They then act quickly and, perhaps, irrationally in terms of submitting a high offer."
Certainly sounds like an open house. Circa 2006.
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