Know the Rules Before Trying Open Houses
The “open house” or “showcase home” discount is not new, but, warns construction attorney and REMODELING columnist D.S. Berenson, the inducement is only “legal and defensible if it’s structured correctly.”
Some sales representatives pull out the showcase home discount and say, “‘I can give you another x% off if you’re wiling to make your home available as a showcase home.’ But if they offer it at every close and they’re not actually doing many showcase homes, then the rep is just throwing it out there and it has no legitimacy,” Berenson says.
To make it legitimate, you need to do the following:
- Showcase enough homes—at least 1 out of 15 or 25—suggests Berenson.
- Have an advertising release, since you’re using a client’s home to advertise your product (a release also builds credibility with the homeowner).
- Have a plain-English showcase agreement that explains the details, e.g., “If you’re selected, we’ll give you at least 30 days notice. We have a year to select your house. It will be on a Saturday from 10 to 5. We’ll staff it. We’ll have insurance. We’ll put up a sign. We’ll post a newspaper advertisement that will look something like this. We’ll leave the house in broom-clean condition. ...”
And make sure that your insurance is really on top of this, Berenson says. “Your liability policy usually covers your people in a showroom or at an event, but in this case you’re engaged in someone else’s home in selling activities not for that person.”