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Tuesday, December 1, 2009 - The Benefits of REALTOR Showings: Why Open Houses are Obsolete - by Kelly Grant at Maxwell Realty

With the improved technology and advanced REALTOR® techniques used for updating and communicating with Sellers and Buyers, open houses are increasingly becoming an obsolete ‘tool of the past’. This article will discuss various components of REALTOR® showings: how they work; tips on how to keep Buyers and REALTORS® safe during showings; and why open houses have become obsolete. 

Firstly: how do regular REALTOR® showings work? Below are some key points: 

(1). Upon listing, the listing REALTOR® (representing the Seller) will compile and forward all property details to the real estate board(s) and MLS™ department. 

(2). The listing REALTOR® will first install an electronic keybox on a Seller’s front door / railing and then register the keybox to track all REALTORS® who open the keybox during the listing. 

(3). The listing then appears on the MLXchange computer system for instant REALTOR® access. It is often the case where tens to hundreds of REALTORS® from all different licensed companies immediately (and throughout the listing) notify many Buyers of a Seller’s new listing so the exposure gained through a REALTOR’S® MLS™ listing is immense. 

(4). Buyer REALTORS® who represent seriously interested Buyers will contact the listing REALTOR® to arrange escorted showings according to the Buyers’ and Sellers’ schedules. 

(5). Sellers are advised to handle showings by leaving all lights on; being as flexible as possible; and to be away from the property during showings so that the Buyers and the Buyers’ REALTOR® can view and discuss the positives and negatives of the property in private. Note that the ‘scheduled showing time’ can vary since REALTORS® may be showing their Buyers a large number of properties so usually the ‘scheduled showing time’ is only a rough estimate. 

(6). If a property is tenant-occupied, the tenants must be provided minimum 24-hours advance notice for showings in accordance with the Landlord and Tenancies Act. 

(7). Keep loose valuables stored away in private (e.g. locked) places. 

(8). If a Seller encounters a Buyer’s REALTOR® or Buyers direct (i.e. the listing REALTOR® is not present), if they are asked any questions they are advised to not answer but request that the Buyers or the Buyer’s REALTOR® ask the questions through their listing REALTOR®. The Sellers are then advised to notify their listing REALTOR® that these questions were asked. The reasons for this: any questions must be discussed carefully and then properly, correctly, and accurately answered to avoid Seller liability and also to avoid reduced negotiating leverage. 

(9). Listing REALTORS® will generally provide detailed feedback to the Sellers based upon what comments the Buyer’s REALTOR® is prepared to provide on behalf of their Buyer. 

(10). If a Buyer is interested, they will write an offer through their Buyer’s REALTOR® (which a high majority of the time is a different REALTOR® and / or company than the listing REALTOR® who represents the Seller). After a given number between about 1 to 20 REALTOR® showings, the Seller, through their listing REALTOR®, will generally find out which of the Buyers will pay top dollar for their home. 

Next, below are tips to keep a home safe for REALTORS® and Buyers during showings to avoid potential Seller liability: 

(1). During winter keep sidewalks and patios shoveled, sanded, and free of ice. 

(2). Do not over-wax interior floors (slipping hazard). 

(3). Always put away dangerous or sharp objects (e.g. kitchen knives). 

(4). Keep all animals (especially potentially dangerous ones) away for showings. 

(5). Ensure no exposed electrical ‘live wires’. 

(6). Use safety signage if required to guard against potential falling or tripping hazards, etc. where there is potential for someone to get injured during a showing. 

(7). Store away any potentially dangerous equipment or machinery. 

(8). Ensure any natural gas lines and valves are sealed and capped by a qualified gasfitter or heating contractor (call ATCO Gas for more information). 

(9). If you do not have small children, it is possible the Buyers may have small children when viewing your home so it is still important to remove any potential ‘small children hazards’. 

(10). Ask your REALTOR® if you have questions how to safely prepare your home for showings – expect that Buyers and REALTORS® will walk anywhere in and around your entire property. 

Finally, below are important reasons why Open Houses are not an effective marketing tool; should be avoided by Sellers; and should never be used as a 'home selling strategy' by any Sellers or REALTORS® - period: 

(1). Tire kickers (i.e. unqualified Buyers) and nosy neighbors dominate the attendees, and everyone who attends usually has no idea of the price, home size, or home features until entering. Presuming these people would buy the home could be compared to ‘winning a lottery’. 

(2). Open House attendees are not screened with background checks as they would be by Buyer REALTORS® for normal pre-arranged showings. As a result, someone who wants to gain entry for illegal purposes (e.g. meaning to do family to people or to property) can easily do so through an open house with limited REALTOR® traceability or scrutiny. 

(3). During Open Houses, Sellers’ belongings are not guarded from damage or theft (only one REALTOR® in the house vs. many people including their children unsupervised throughout various areas of the home). There is a very high risk of property damage to Sellers as a result. 

(4). Open Houses are a sign of Seller desperation (in my experience well over 90 to 95% of homes that sell at top market value do so without an open house Buyer so Sellers are not losing any exposure or market value by refusing to have an open house conducted on their home). 

(5). Buyers can receive a private open house anytime by calling their REALTOR®. With open houses, this is not the case where potentially competing Buyers are walking together in groups through a home, and Sellers' relatives could be at the open house spying on Buyers without their knowledge, and therefore Buyers may have limited privacy about discussing together at the property what they see. 

(6). Most Buyers are represented by a Buyer REALTOR® who has been spending time, effort, and expense finding and showing them homes and the Buyers may not appreciate suddenly viewing a home in the presence of the listing REALTOR® whose primary job is reporting to and representing the Seller's best interests exclusively. 

(7). If you live in a condo, many condo complexes will prohibit (or else should take action to prohibit) open houses because they provide easy entry for untraceable, ill-intentioned individuals (i.e. criminals) into the complex. 

(8). A ‘Virtual Tour’ (if done incorrectly to include a video walking through the house showing too much of the layout) is essentially an electronic form of an Open House that can give the wrong individuals (i.e. criminals) too much information about your home including how floors are laid out, entries and exits, and exactly what items are located where.

(9). Open Houses in general work to market the REALTOR® more than the home. Therefore Sellers, upon becoming aware that the ‘Open House’ technique is not in their best interests, should prohibit them to guard against Open House risks. 

(10). If an Open House is conducted immediately upon listing and an offer comes in right away before other REALTORS® have had an opportunity to show the property, how does a Seller really know that they have achieved the best sale price? The short answer: they do not. To make sure that Sellers get the full value of the REALTOR® market, any Seller willing to accept an Open House despite the drawbacks and risks mentioned above, these Sellers may want to wait until at least several weeks after listing to ensure ample opportunity has been provided to the entire market.

In summary, when performed properly, REALTOR® showings are the primary effective tool for the benefit of both Sellers and Buyers - even in very slow markets. It is important that Sellers take adequate proactive steps to protect the safety of Buyers and REALTORS® who are entering their home for showings. Sellers are advised to discuss Open House risks and liability with their REALTOR® before ever agreeing to allow an open house that could trigger an unexpected negative event. 

[Article written and ©2009 by Kelly Grant, M.Eng., ABR, NCSO, P.Eng. - REALTOR® at Maxwell Devonshire Realty in Edmonton, AB]

Disclaimer: for those readers not currently represented by another licensed REALTOR®, to obtain more information on this topic and / or if you are serious about selling or buying in the Greater Edmonton Area, call Kelly at 780-414-6100 (pager) or send Kelly an email to to schedule a confidential appointment.

posted in General at Tue, 01 Dec 2009 15:27:37 -0700

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