When you are in the market to buy a house, it seems like everywhere you look there is an “Open House” sign practically calling you by name to come in and take a tour. It sounds harmless, right? I mean, isn’t this the best way to find that house you’re looking for? You can just walk right in, check out the house, make a little conversation with the agent hosting, and if you love the house, then it shouldn’t be too hard getting it…right? Not quite. Buyers who make the mistake of only wanting to see open houses when searching for their future home, most often have terrible experiences and miss great opportunities that could have been attained had they been represented by their own real estate agent.
If touring a bunch of open houses in the hopes of finding the best one is advised against, then why are they even there? Well, essentially because the sellers want to host them. Sellers want to do everything they can to give their house its best shot at selling and they believe this will allow more potential buyers a chance at seeing their home. It’s important to note that open houses themselves are not the issue. The problem comes in when you, as a buyer, resolve to only visit open houses without ever hiring an agent to represent you. This leaves you vulnerable and unprotected against the tactics of aggressive sellers’ agents. Let’s briefly uncover some of the pitfalls that come from being an unrepresented buyer in the lion’s den of an open house.
Wait, are these our only options?
One of the reasons it is so vital to hire a great real estate agent is because some absolutely fantastic homes never make it to the “open house stage” of their active-on-the-market lifespan. This can be either because the owner does not want to host an open house (which isn’t a disadvantage on their end), or because the listing (or the market) is so hot that the house goes under contract before ever getting to the weekend that it’s scheduled to have an open house. As an unrepresented buyer, you miss out on the chance to see a wider range of houses that are available and therefore, end up getting whatever is left over. That doesn’t mean all open houses are less than ideal homes, it just means you’re limiting your possibilities when those are all you ever want to see.
The early bird gets the worm. Especially if that bird has a better offer.
Let’s say that a really great listing comes on the market and it is absolutely amazing. The owners want to hold an open house the very first weekend after it is active, and their agent agrees to host. Now, you see that house as active online but are waiting till Saturday’s open house to be able to go check it out. In the meantime, other buyers who are represented by an agent have the privilege of getting an appointment and seeing that house much sooner. And now the home has multiple offers before the open house even happens. Some sellers will continue on with their scheduled open houses and decide that weekend which offer they would like to accept. Here’s the thing though, if you come into that open house as an unrepresented buyer, you have no idea what kind of multiple offer situation you are walking into. You are not privy to the same insights, discussion, or even pre-negotiation talks as someone with an agent would be. Moreover, sellers tend to feel a higher sense of loyalty toward buyers who came in by appointment with an agent and have already submitted an offer. So, the fact that you waited around for open house day because you didn’t have another option could cost you a home you really loved. Furthermore, you could potentially submit a lowball offer without realizing that there are several offers already on the table and without having had the proper guidance to give your offer a competitive edge. Hence why the worm went to the early bird whose agent informed them on how to make the best offer.
You paid how much for that house??
Suppose you go to an open house and you completely fall in love with it. You talk to the agent hosting and you express your interest. There are a couple of things that could happen simply because you don’t have an agent looking out for your best interests. Firstly, and most probably, you begin thinking with your emotions instead of knowing the facts. Secondly, the seller’s agent will likely use these emotions against you and make you think you have to submit an incredibly high offer, well over what the home is worth, in order to even have a chance at consideration. An emotional decision based on fear of losing the home you feel is the only one for you, paired with the fact that you don’t have a great agent in your corner, could cause you to enter into a contract that is, essentially, a rip off for you.
I take everything back, I’m not ready for this.
So, you have just completed the home inspection stage of your purchase process and you’re feeling overwhelmed, and slightly terrified, by all the findings listed in the inspection report. You panic. You want out. You don’t want to continue with this contract. You even regret ever having put in an offer. This, folks, is called buyer’s remorse. We all experience it some time or another with mediocre purchases, so, imagine the weight of that feeling when it comes to the purchase of a house.
Unrepresented buyers who get themselves into a contract with a seller after having visited an open house are more likely to experience buyer’s remorse as opposed to a buyer who was well prepared by their trusted real estate agent on what to expect. The main thing that cranks their anxiety up full scale is the inspection report. Inspectors can often give you an inspection report that can seem overwhelming if you do not have anyone to explain it to you. The inspector has an obligation to cover all his bases, so that he is not later held liable or accountable for missing something. This is the reason why most inspection reports will be lengthy and cover everything the inspector finds in the house. A real estate agent can explain to the buyer which findings in the inspection require immediate attention and which are not serious issues, which greatly eases the worries of a buyer. If you go through this process without an agent representing you or without fully understanding what to do with that inspection report, you will have a gnawing feeling that you made the wrong choice and will be unable to enjoy the rest of your home buying process.
Real estate agents – the good, the bad, the ugly.
The number one reason some buyers will avoid working with an agent is simple. They just don’t trust them. This is mainly because, either they have had some bad experiences with pushy or aggressive agents, or they have certain preconceptions that an agent is only going to “play them” in order to get more money for themselves out of the deal. Now let’s address the money bit for a second. Of course, agents enjoy getting their commissions! Wouldn’t you? And trust me, for all their hard work, negation skills, advocating on behalf of your best interests, and playing mediator between you and the seller, often taking all the heat…they absolutely deserve that commission. It’s also important to note that for many agents, this is their full-time job, and therefore their livelihood. If they don’t get paid, it’s their families that hurt, not you. However, an agent’s hard work and best efforts shouldn’t be mistaken for a greedy desire to earn a bigger commission. In fact, a buyer does not even pay the agent’s commission. An agent’s commission is paid for by the seller. So, don’t make the mistake of not hiring a great agent who will have your back just because you think that all agents are money hungry. Contrary to popular belief, the best agents are actually motivated by your goals and meeting your needs, not by their paycheck. A buyer’s lack of trust or unwillingness to commit to an agent can lead to several missed opportunities or getting stuck in a potentially bad deal.
Are there aggressive, pushy, or greedy agents out there? Sure. I mean, honestly, which field doesn’t have such people? Although they are not as common as you would think, when you attend an open house as an unrepresented buyer, you are more likely to encounter an aggressive agent and are more likely to be susceptible to their ploys. Buyers somehow mistakenly think that agents they meet at an open house will cut them some kind of deal just because they are now working with this agent to buy that house. This is not true. The agent hosting an open house works for the sellers. They are loyal to the sellers. They have the sellers’ best interests in mind. You have to understand that their duty to you is limited at this point. Moreover, they will not risk losing their license by divulging seller secrets to you to give you any kind of advantage. If you do find yourself working with an agent who is willing to do that though, then run the other way. Additionally, if you are represented by a real estate agent and choose to go to an open house unaccompanied, then make sure you make hand your agent’s business card to the agent hosting and clearly communicate to them that you are already working with another realtor. Otherwise, things could get very messy, very quickly with something called procuring cause. But, more on that in another blog.
Which one, which one?
I hope you are beginning to understand why meeting an agent at an open house as an unrepresented buyer isn’t in your best interest. With so many realtors out there, how do you know which agent is the right one for you? Well, in order to spot a not-so-good agent, you have to first know who qualifies as a great agent. Remember, bad agents aren’t only limited to the aggressive, rude, or greedy ones. A bad agent may not be bad in character at all. In fact, they may be incredibly sweet and kind. What makes someone a bad agent isn’t solely their personality, it has to do with their skills as well. Now hear me on this, skills doesn’t mean experience. Although experience is important and it does fine tune a person’s skills over time, it doesn’t necessarily mean that you should completely write off someone who is fairly new to the real estate business. Especially if they are working under a broker with great experience and an even greater reputation in the community. An amazing real estate agent is one who, along with integrity, has the knowledge and skills to make one of the biggest transactions of your life as smooth as possible. When you are looking for an agent to represent you, be on the lookout for these qualities: someone who is honest, has excellent communication skills, is motivated by your needs and interests, has effective negotiation skills, has a good understanding of the current market, is highly recommended by others or someone who works under a well-experienced broker, and most importantly, someone you know you can trust. If you know a family member or a friend who is a real estate agent, the same rules apply. Don’t just go with someone you know; go with someone you know is great at what they do. And be honest with your real estate agent loved ones! Whether you choose to work with them or someone else, just be straightforward about your decision and your reasons. Trust me, they will appreciate it more than you know.
But if you insist…
Some people, even after knowing the risks associated with going to an open house as an unrepresented buyer, will still choose to go anyway APA – against professional advice. If that’s you, at least remember this one thing: please, please, do not spill your beans to the real estate agent hosting! It is important that you be mindful not to reveal to the agent anything about yourself, your financial situation, your reason for looking to buy, your…anything. Of course, be polite and make small talk if necessary, but be aware of what you are sharing as it could later come back to bite you in the keister. Also, all of this information applies to virtual open houses as well. Searching and browsing houses online is one thing, but if you decide to interact with the agent on the other end…well, just don’t do it.
I hope this blog has illuminated some unexpected truths to any of you who are thinking of visiting open houses as an unrepresented buyer. Trust me, the agent makes all the difference in the world of real estate, so, do yourself a favor and hire one with integrity and reliable experience. Your homeowner journey will be that much more pleasant when you have a great agent backing you up.