Open Houses Risky Business

Here’s a comment I hear lot when people learn I am a Main Line real estate agent:

“We like to research the homes for sale in the area online and then go to open houses to see what our money will get us. We see no reason to hire an agent for that. We don’t want to waste their time until we see something really good.”

I try to be as polite as possible, but I do tell people that I believe that is a very risky procedure, although very common. I suggest that the worst case scenario would be that the seller’s agent, who is sitting at the open house, shows you through the home and then suggests that he or she can write your offer on it. This is perfectly legal in Pennsylvania but rife with potential issues. Remember, this is the person who has a longstanding and contractual relationship with the seller who you just met!

Another possibility is that you go to the open house, love the house and then select an agent to represent you in writing an offer. That agent may have a problem getting paid since the listing agent feels that they were the person who sold you on the house and may feel he or she is not obligated to share commissions with a buyer’s agent who did not show the house.

If you had started the process by interviewing agents first and settling on one you liked, that person should be happy to be “bothered” to take you to any home, either at the open house or at another time convenient for you (which I prefer). Then you can quietly view the home and discuss its plusses and minuses without the agent for the seller being there to hear what you are saying. You can decide what the house is worth and how best to present your offer to get you the best deal. You can be comfortable that your agent will not disclose that you have to be out of your rental place or that your father is a well known and wealthy person. And your agent will be entitled to share in the commission, so will be incented to work hard for you.

I recently read a marketing column directed at agents written by guru Dirk Zeller that suggested listing agents should always sit at the open house for their most expensive listing because “the purpose of an open house isn’t to sell the house: it’s a lead source”. What does that tell you?

‍

‍

‍