Open Homes and Private Inspections
Every weekend thousands of property owners all over Australia ask their agent to open the doors of their homes for 30 minutes in the hope that the right buyer will come along. The goal being to create an atmosphere and a sense of competition leading to a sale.
At the same time there are agents whose preferred method is to bring pre-qualified buyers through homes one-on-one by way of a private inspection. Their goal is to allow the buyer the time and space to connect with the home leading to a sale.
But which way is the best? How should a buyer experience your home?
The Challenges with Open Homes
Fixed Inspection Times
Fixed inspection times can make it difficult for buyers to attend, as they often clash with other agents’ open homes. If two homes that a buyer is interested in are open at the same time, then they often have to rush between both. An agent should be making it as easy for buyers to deal with them as possible. This doesn’t achieve that.
Space Perception
Why did you declutter your home before putting it on the market? Was one of the reasons to make it look bigger?
Decluttered homes look bigger than cluttered ones and bigger homes sell for more than smaller ones. Right? So which method of inspection will make your home look bigger? The one with 20 people in it simultaneously or the one with an agent and a buyer alone?
Negative Feedback
No two buyers are the same. They all have their own perceptions. When you open your home for inspection you also open yourself to the possibility that the criticisms from negative buyers can be overheard and affect the feelings of positive buyers. Keep buyers separate both emotionally and financially!
Agent Awareness
If your buyer does have an objection, do you want your agent to be able to hear it? At open homes, agents are usually stationed at the front door and may not hear or address buyer objections. This can lead to missed opportunities for the agent to overcome these objections and obtain an offer.
Time Constraints
The longer a buyer stays in your home the more likely they will be interested to buy it. Buyers might feel rushed if they are coming from another inspection and only have ten minutes to view the home before the end of the open. This limits their time to view your home thoroughly and therefore limits the impression your home will leave on them.
Limited Buyer Information
Private inspections provide an opportunity for an agent to “Pre-qualify” the buyers who call. It’s a process of carefully asking questions in order to find out whether or not the buyer is suitable for the home. It is also an opportunity to gather information that will help during the negotiation. A good understanding of the buyers needs not only helps the agent negotiate a better deal, but also helps the buyer understand that the home actually does fit their needs (or doesn’t!). It’s not an adversarial part of the process but it can be an important one.
Contrast that with what information an agent gathers at an open. Aside from name, phone number and email address they often know little about attendees, which can hinder negotiation later and be a cause of missed opportunities.
Bait Pricing
They say that there’s one thing worse than an open home that nobody attends – an open home that only one person attends! This informs that one buyer that has attended that there is no competition, and the price might be too high.
To avoid that potential problem and ensure a sense of competition, some unethical agents might use a “bait price” to attract buyers who cannot afford the home, leading to wasted time and effort.*
What is the Purpose of an Inspection?
Is it to create a fear of loss? Or is it to allow the buyer to fall in love with your home?
It might sound like a strange question as both elements are needed in any successful negotiation, but are both needed during an inspection? Short answer: No.
You do NOT need an environment of fear at an inspection.
Put simply, as important as competition is to negotiate the best price, it’s something that can be introduced to the process AFTER the buyer has fallen in love. A skilled agent using the right negotiation method can create the necessary environment of competition to obtain the buyer’s best price.
In contrast, as it relates to matters of the heart, there is no better time for a buyer to emotionally connect with your home than when they are standing in it. Maximise that effect by giving them the time and space to do so!
Although both inspection methods do have their merits, it’s simply not worth sacrificing the chance for a buyer to connect with your home because they were rushed through an open for the sake of creating a fear of loss. For that reason, a private inspection method should always be the preferred method for any seller.
Benefits of Private Inspections
Private inspections can overcome the issues associated with open homes. This process allows genuine, pre-qualified buyers to bond with the home, picturing their furniture, their children playing in the yard, and imagining their life in the space. Their objections can be answered, their opinions remain their own and the agent can begin the process of negotiation with them immediately.
*Legal Note - Please note, it is illegal to deliberately underquote the price of a property in Victoria. More information here.
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