Some property owners are hurrying to sell their house and gain back the money they invested in that property. If you are one of them, then learning about open houses is necessary to determine the cost of selling a property wisely.
Open houses or open homes are previews that give potential buyers a chance to inspect the real estate asset that you are selling. Open homes help you highlight the features of your property that make it a worthy purchase.
In May 2023, Upside Realty, a national real estate agency in Australia, reported a considerable increase in people attending open home inspections - noting a 78 per cent upturn in attendance. According to their report, Victoria was observed to have the highest boost in inspection rates by 123 per cent. Queensland followed with a 117 per cent surge, and NSW gained an additional 38 per cent.
These figures are influenced by the buyer's confidence and tightening competition in the real estate market.
This article will debunk the myths about how open houses affect property value in Australia.
Top 5 myths about how Open Houses Work
Myth 1: Open Houses Are Essential for Boosting Property Value
Open houses work on a case-to-case basis. A real estate asset's value primarily depends on the demand for the type of estate you sell and the country's economy.
For instance, the Australian housing market experienced a drop in sales because of massive inflation in mortgage prices early in 2023. The decline in house sales went on for eight consecutive months, starting way back in June 2022. Even though median house sales prices boosted 13.4% year over year, many real estate agents believe prices will stabilise by early 2024.
There is also the case of who your target audience is. It would be best to research the estate demand for that specific group. While the economic circumstances may be favourable, your house may differ from what your ideal buyers seek.
This is how demand and economy work together to determine the property value of a house or real estate asset. A careful market analysis and cooperation with a licensed real estate agent can better determine how much you can price your home for.
Myth 2: Open Houses are the Primary Driver of Property Value Increase
Home renovation shows have given us a different perspective on the impact of house upgrades on the cost of selling a property.
Take, for instance, a calculator made by Michael Matusik of Matusik Property Insights. His data revealed that many homes in South East Queensland were renovated after being sold in the last decade. In some cases, the renovation costs were almost half what the house was initially bought for. Surprisingly, in 25% of these cases, the renovation expenses exceeded half of the original purchase price.
This suggests that while homeowners may have invested more in renovations than the initial home cost, the increase in their home's value might not match that investment.
Myth 3: Open Houses Require Significant Investment to Improve Property Value
While hiring a professional home stager has become increasingly popular, DIY techniques are also accepted. Your DIY will work well for you if you have the time and resources.
Connect with your local real estate agent because they can give you practical tips on what styles will help you attract the attention of buyers in your area. You can also schedule brainstorming sessions with your agent to determine which areas of your home need highlighting and what additional decorations will help other parts stand out.
If you plan to do it yourself, begin by looking into renting furniture and storage expenses. The total cost isn't significantly different from partial staging. Consider the time and effort required for this task concerning your home.
Myth 4: Open Houses Always Lead to Quick Property Sales
Another misconception is that high attendance rates lead to high prospects for actual sales. In fact, it depends on your price point.
Homes with affordable prices often catch the interest of first-time buyers in the local market. These buyers usually have jobs during the weekdays, so they spend time searching for homes on Sunday afternoons, after a slow morning or meeting friends for brunch. However, attending an open house sometimes means they'll make an immediate offer.
On the other hand, luxury properties tend to attract more private clients who prefer to view homes discreetly on their terms. Public open houses draw in curious visitors, like nosy neighbours or people who aren't genuinely looking to buy. For these reasons, higher-priced homes are less likely to have public open houses.
Myth 5: Open Houses are Conducted Solely for Property Value Enhancement
Home staging is not solely for selling a real estate asset. Hosting an open house offers the chance to hear directly from visitors and gain insights into how your property is perceived. Feedback from their reactions, comments, and questions can guide adjustments and highlight selling points to improve your marketing strategy.
Additionally, an open house enables potential buyers to experience the property firsthand, creating an emotional bond that online listings or individual tours might not achieve. This emotional connection enhances the likelihood of receiving offers and makes buyers feel more connected to the property.
Deciding Whether Open House is Right for You
Open houses hold significant importance in the Australian real estate scene. While investors predominantly host these events, they also cater to the needs of buyers and tenants. In fact, 79% of potential buyers and tenants consider in-person viewings extremely important in their decision-making process.
Notably, private viewings are prevalent, as a considerable 89% of serious buyers opt for this approach before finalising their property transactions. This collective data underscores the pivotal role that open houses play in influencing real estate choices across various segments of the market.
Here are some indicators that will help you decide if you need to hold an open house.
1. Your home has distinctive features compared to your neighbours
If your house has extra amenities that cannot be easily found in other homes, you may need to consider holding an open house because allowing potential buyers to see your property in person can help them appreciate its uniqueness better. Also, this will help them understand the cost of selling a property.
2. You want to reduce marketing costs
There is a possibility that your house will sell faster if you open it for public viewing. It reduces the hassle of individual appointments with interested buyers. Instead of spending on marketing tools and techniques, you can invest in a professional home stager and house cleaner. That way, you lessen your property’s waiting status in the market and achieve it in just one event.
3. You want to attract first-time home buyers
First-time home buyers often give time to inspect houses that may fit their budget. They are also the buyers who are always on the lookout for open houses held on the weekend. Holding an open house can be a great way to connect with them.
While your open house might not lead to an instant sale, getting your home ready for it can make your photos shine and attract valuable private viewings. Especially if few homes are available in your area, potential buyers who missed out on bidding wars might increase their offers to secure a house and avoid missing out again. Hosting an open house could also be more convenient than dealing with frequent showings, saving you from ongoing inconveniences.
Conclusion
As property owners strive to recoup their investments and expedite house sales, understanding the significance of open houses becomes essential. Open houses, or open homes, provide a platform for potential buyers to inspect the property being sold, enabling the showcasing of its attractive features and hastening the process of finding interested buyers.
Debunking these myths, it becomes clear that the influence of open houses on property value is nuanced. Market demand, economic factors, and the specific preferences of potential buyers all play crucial roles in determining the cost of selling a property. Open houses offer feedback and direct interaction with visitors, aiding in property perception and adjustment of marketing strategies. Contrary to some beliefs, open houses are not solely aimed at property value enhancement; they also facilitate emotional connections between buyers and the property.
While open houses may not guarantee an immediate sale, their benefits are significant. Preparing for an open house enhances the property's visual appeal, inviting valuable private viewings. This is especially valuable in regions with limited housing inventory, where potential buyers might intensify their offers to secure a property. Choosing an open house over frequent showings can provide convenience for both sellers and buyers.
In the Australian real estate landscape, open houses hold a pivotal role. They cater to investors and potential buyers, and tenants, with in-person viewings being highly regarded. As this comprehensive exploration of open houses has revealed, their impact extends beyond a mere marketing tactic; they serve as a dynamic tool for engaging buyers, fine-tuning strategies, and fostering connections between properties and potential owners.
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