Step 4: Understanding The Real Estate Open House

A real estate open House is when a property seller essentially ‘opens’ up the house for the inspection and evaluation of whatever prospective buyers happen to be interested. It isn’t unusual for homebuyers to pass by an open house in progress and decide to check the place out, even if they weren’t initially looking for a home in that area (so, don’t be shy about stopping by one that catches your eye). With or without an official agent on hand to guide you, an open house is a great way to get an informal look at a potential home.

How do You Find a Real Estate Open House?

While the idea of driving by an open house, talking to the owner, and landing a great deal is appealing, most buyers find open houses through local ‘house hunting’ networks, papers, or online. You can search for open houses in the area or areas you’re looking to move into online. If there’s a specific property you want to look at, you will probably need an agent to arrange a walkthrough. Usually, the listing agent and/or the owner will be the person on hand to answer any questions you have. Before we begin discussing the ‘should’s and ‘should not’s of the open house event, there is a critical piece of information you need to be aware of.
Buyer’s warning: The Procuring Cause clause. It isn’t always the case but sometimes a listing agent will claim ‘procuring cause’ when you walk their real estate open house and later purchase it. They may legitimately be the reason you’re there (as in they contacted you) but it may also be that you found the open house on your own or were directed there by other means. If they are directly responsible for you finding the home, we still suggest that you not sign anything unless you speak with them on a personal basis and decide to contract them. If you or your agent found the open house, then you need to be sure they (the listing agent) does not claim a fee for having ‘procured’ you. This would mean they are claiming the right to charge a commission fee for you finding the house, even if you already have a buyer’s agent or found the house entirely on your own. This can happen if you sign any document during the open house procedure, even a sign-in document.

Do not sign anything unless you are given the opportunity to verify you already have an agent or found the place on your own, even if it’s just a sign-in sheet.

A good way to handle this situation is to give the listing agent/seller your agent ‘s card and explain that you already work with a real estate professional. If you’re there on your own, it’s that much more important that you don’t give any personal information away. It sounds bad but the fact is, even if you’ve found the perfect place and are thinking of buying it, you don’t want to pay a commission to someone who didn’t help you during the home hunting process. Explain to the person in charge that you are only casually interested, and will get in contact with them in the future. If they pressure you into providing information, simply leave them your initials and no contact information.

Things you should and should not do during a real estate open house.

Should:Ask questions and listen to the answers of other buyer’s questions. They may have asked a question that you would not have thought of.
Should Not: Be rude, interrupt an on-going conversation, or otherwise offend the host. Remember, they, as seller or agent, may be responsible for moving the buying process forward if you decide to buy the home.

Should: Keep your game face on while engaging the host in conversation.
Should not: Divulge your financial situation, your current home hunting results, or your strong desire to purchase the home. Whether it seems likely or not, this information can be used against you.

Should: Walk around and get a feel for the property.
Should Not: Invade rooms that are deemed ‘off-limits’ or plunge into the seller’s closets. Looking is fine. Touching items in the home may be problematic (particularly if the owner still keeps personal things in the house). Open house etiquette states that you avoid offending- knowing you can always arrange a personal tour with an agent later.

Should: Investigate the Home and the Neighborhood.
Should not: Assume you have the right to demand answers and get concrete information. Open houses are generally informal. Even if the hosting agent knows a lot about the property, during an open house is not the time to start settling a deal. Especially because it might give the agent a reason to say there was a ‘procuring cause’.

Should: Ask about apparent issues or areas of concern.
Should not: Point out a home’s visible flaws publicly. Not only could you offend the seller, it might make you look like a ‘difficult’ buyer. It’s not unheard of for seller’s to avoid a buyer they perceive to be critical or difficult, even when it means taking another lower offer. Many sellers have a sentimental attachment to their home, and ultimately, they want a buyer whom they believe will enjoy the house, not someone who is going to criticize it.

Should: Take personal notes.
Should not: Take pictures and video without asking permission. Sometimes the original owner hasn’t completely moved out. Taking pictures is the same as documenting their lifestyle. Alternatively, the house may be bare and completely vacated, but taking pictures may be perceived as an attempt to downplay the property. It’s always best to just ask first.

Should: Try to strike up conversation and be comfortable around the host.
Should not: Make yourself TOO comfortable. Sometimes the furniture in a house belongs to the seller, sometimes it is rented, and sometimes it isn’t even real! Take care before throwing yourself full-force on top of the guest bed.

Remember that a real estate Open House is an informal way for the real estate agent to showcase the property. If you want to go on a guided tour of the home, or other interesting properties, speak with your own buyer’s agent or contact each individual listing agent to arrange this.

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