Will the traditional open house return? And does it really need to?
With viewings severely limited, some brokers are asking if you can even describe these showings as open houses.
Open houses are allowed again in New York City, and there are so many safety restrictions required to prevent the spread of coronavirus that some brokers are questioning whether the traditional, crowded open house will ever return—and if it is really necessary to seal a deal.
Access to open houses will be tightly controlled now: Only open houses of vacant or unoccupied properties are allowed, and most in-person apartment viewings in NYC are going to take place by appointment only, staggered over a period of hours with limited people, frequent cleaning, and plenty of social distancing.
This is a far cry from the traditional open house, where interested buyers (and curious neighbors) filed through an apartment during the course of an afternoon. Brokers also have to consider limited liability waivers and are encouraged to use health screening questionnaires.
With so many hoops to jump through, and viewings severely limited, some brokers are asking if you can even describe these showings as open houses.
"It is very complicated. There are many different layers—you have to think of the owners, the tenants or buyers, as well as the building entity and their set of rules and the safety of the brokers or agents," says Vickey Barron, a broker with Compass. “If [viewings] are by appointment-only and staggered, that’s not an open house,” she says, adding that holding an old-style open house would be "reckless," in the current health crisis.
The selling power of the open house
In the past, having a busy open house was reassuring for sellers to see that their property was pulling in interested buyers at the price they were asking. However, seeing that translate to a purchase is more nuanced. Domingo Perez, Jr., an agent at Warburg Realty, says he doesn't believe open houses sell properties.
"At best it is an agent's opportunity to leave a lasting impression on prospective buyers that are not represented by another broker," he says.
Barron agrees, saying open houses are more often a networking opportunity than an effective sales pitch and when you're dealing with a health issue like the coronavirus, it's not the time for such a "self-serving endeavor." Like many, she's focused on personalized showings with buyers she has already vetted and knows they will get through the approval process of the co-op board or have their finances in place.
Personalized showings, it turns out, might be a better use of everyone's time. Susan Landau Abrams, a broker at Warburg Realty, says buyers who arrange for a showing appointment versus randomly visiting open houses are typically "more interested in the specific property." She says "the new normal" could be a better opportunity to showcase and sell apartments.
However, some brokers say the best way to get multiple offers on a property is to have 15 or 20 people at an open house, which is why (in the past) neighbors were often sent postcards or invitations to the showing.
"We would sell a lot of properties within two or three open houses," says Carson Alexander, a salesperson with Triplemint (a Brick Underground sponsor). Alexander says a popular open house works to "demonstrate value" by having a buyer's "interest validated by seeing other buyers interested."
Nada Rizk, an agent at Brown Harris Stevens says the open house provides important data and is much more than a networking opportunity. "It’s a whole experience from exploring a new neighborhood, meeting the doorman, to seeing the carpet in the hallway."
Prior to the shutdown, Alexander found data from Halstead’s Open House Index a useful resource to show whether or not his own listings were competitive. While he is hopeful the traditional open house will one day return, he thinks if buyers see that a property has back-to-back appointments it serves the same purpose as a busy open house. "The tool isn't lost, the execution is changed," he says.
Fritz Frigan, Halstead’s executive director of sales and leasing, who compiles the Halstead Open House Index, believes "the traditional open houses will come back one day." In the meantime, he's ready to track attendance at appointment-only viewings starting this weekend.
Live streaming an open house
Even if the traditional open house is gone for now, there are still opportunities to showcase a property to multiple people at the same time. Noel Roberts, head of private clients at Nest Seekers International, says most brokers turned to the internet out of necessity when the shut down happened. He's been giving open house tours via Instagram live and says it's a new "interpretation" of the traditional format that is "definitely going to continue."
Likewise, Perez says if there's a lot of interest in a property he is selling, using live or recorded broadcasts on social media is a practical solution. "I will conduct an open house with a virtual tour on the spot and invite everyone to participate," he says.
Alexander has been doing Zoom showings for his listings and says it's easy to identify "real buyers for the property," through the questions and level of engagement in the online chat. So the casual open-house visitors will have to find a different Sunday afternoon activity but for the serious buyer, there is so much virtual content available that by the time they turn up in-person they will likely be much more informed about the property than in pre-pandemic days.
The importance of disclosure
The absence of the traditional open house makes full disclosure about the apartments pros and cons that much more important. "Disclosure is powerful and builds trust," Barron says.
She points out brokers fear disclosure because they worry buyers won’t want to come and see the property but says "if you do it the correct way, they will still come and see it, and feel comfortable and trust you in everything else you say."
Barron says some of these adjustments are well overdue. "The pandemic is allowing us to fine tune and correct some of the broken pieces of how we conduct our business," she says.
