Do Open Houses Really Work? Yes They Do…FOR THE AGENTS!
The truth is that open houses have become more of a way for agents to grow their business pipeline. Most top producing real estate agents feel that open houses are a waste of time if solely used to find a buyer for your home.
In real estate, an open house is when a real estate agent welcomes in prospective buyers (and the general public) to a home listed for sell. It’s been the accepted method of marketing a home since the early days of home ownership.
In a Top Agent Insights Survey complete by Homelight, 63% don’t always recommend open houses and 37% always recommend them.
I recently met a nice couple looking to sell their home here in the Palm Springs Area. Part of my listing appointment process includes finding out what their expectations are for the agent they hire.
Their one and only requirement……they wanted an open house every weekend. As I probed further to find out what their goal was with holding the home open every weekend, their response was “because our neighbor down the street sold their from a open house”.
I did my best to explain to them about open houses and their true ability to sell a home and they were unwavering in this decision. Knowing that I was unable meet this expectation, (the neighborhood rate of sales was around 3+ months), I decided to not take the listing and wished them a quick sale with whoever they hired. To date the home has not been listed for sale!
When I got back to my office, I did some digging. Turns out the house they were talking about…..didn’t sell because of a open house…as i secretly expected during my listing appointment.
I called and talked to the agent that represented the buyer. It turns out, the agent was not available to take the buyer to see homes that particular weekend, but being the great agent she is, she provided them a list of the homes on their list that were holding open houses that weekend. She provided the times of each open house and also called the listing agents and informed them that her buyers would be stopping by their open houses.
Well, as we know, they went, the saw, and they bought. So I ask you…did the open house sell the home? Or did their agent do a fantastic job of going the extra mile, getting info on open houses, calling the listing agents, etc?
The down and dirty……Open Houses area a waste of time for a seller and pretty much entirely unnecessary to sell a home in this digital age. (Read further to learn when a Open House may be a good idea).
Real Estate Agents do open houses for one real reason…….to get more business. Nationally, less than 1% of home sell due to a open house. When I was new to the business back in 2005, I was told by my broker….”Do open houses everyday, it’s the best and fastest way to get more business without spending a ton of money”. So I did and it worked! I earned an extra 10 closings that year all generated from doing open houses. But not one sold a home I held opened.
Just one of the many “Open House” teachings to Real Estate Agents. Does this sounds like they are helping agents to sell your home at an open house or helping generate leads?
And I’ll be honest here…….when a newer agent comes to me and ask “whats the best way to get some business going without spending to much money”, I tell them the same thing…. do lots of open houses. And even experienced agents, when their business is in a lull, their first reaction……do open houses.
Why Open Houses don’t (99% of the time) sell a home but gain more business for the real estate agents doing them:
- Most buyers coming through have no idea if the home fits their needs, criteria or their budget…once inside, if the home does not meet their needs and/or budget, the agent will work toward helping them find something that does.
- Many of your neighbors will come through to sneak a peak, prompting the agent to see if they have been thinking about selling their home. If they say yes……that equals potential more business!
- Some of the buyers that come through have a home to sell 1st……another potential client for your agent. Even if they love your home, they still need to get their home first.
Here is the truth: If open houses were banned across the country tomorrow there would be no fewer homes sold. Those folks who really wanted to get into a home would schedule an appointment. The rest of the Riff Raff would have to find something else better to do on a Sunday.
Could you be part of the 1-2% of the people who sell solely because of an open house? Sure and you also might win the lottery too
If you are a homeowner reading this and you are thinking what difference does it make whether an open house works our not. Well, it doesn’t really as long as you don’t care who walks through your home! I mean anyone…. not just potential buyers, but nosy neighbors, potential burglars and yup even the homeless could walk in that door.
Open House means what? Open House. Open for anyone to come through the door.
Open houses give buyers ample time to go through the home and pick apart the flaws and provide reasons why not to buy it or send in a “low-ball” offer.
Let’s flip your role for a minute. If you were a buyer……what would you do to find your home. Go online and look at whats for sale? Call an Agent and have them help you find home? Or would you spend your weekend driving around going to a bunch of open houses. My guess, if you are a serious buyer, you would call an agent.
Is is ever a good idea to have an Open House on your home…The quick answer is YES!
Location and character of a home can matter. If a home is in a development with all similar type homes and amenities, then open houses aren’t really a benefit.
But a more unique home or one in a high demand neighborhood that is close to busy popular areas, an open house could be really beneficial.
Also, homes located in a high demand area with very low inventory, having a “new on market’ open house the 1st weekend it’s listed is a benefit to both the seller and the agent
Another good reason to hold a open house on your home
If you still living in the home and your schedule or circumstance makes it very difficult to schedule multiple showings for buyers to see the home, then scheduling several open houses over the course of a few days or weeks would be very beneficial to you, your agent, and the buyers wanting to see your home.
The bottom line: You need to evaluate your situation with your agent. Are you located in a gated community? will it be easy for buyers to get in. Is there a large inventory of homes for sale in your area, and if so, would yours stand out among them? Is there a large of amount of auto and foot traffic to bring people to the open house. These are just a few things to discuss with your agent when creating the marketing plan of your home and whether or not that plan will include open houses.
So you ask, do I do Open Houses? Yes I do! When my clients want them or if I feel the property requires it, as mentioned earlier. Even though, in most cases, open houses are a waste of time, I do keep them in my marketing tool-belt for when they are needed.
Laura Lake’s Seller Listing Service
As I have mentioned in my blog…..How to Choose Your Real Estate Agent. With today’s technology, it’s just about impossible for a buyer, that is looking for a home in your area, in your price range, to not to see your home for sale.
To sum this topic up…There are homes that can benefit from open houses. But they need to be in the right location and be in immaculate condition along with an agent who knows how to do open houses effectively. But, again, the main reason for the open house, at least for agents, is to gain more business. And yes, it’s nice to be sitting there at an open house and have a buyer walk in and love it and buy it on the spot…..but…I am still waiting for that to happen and I can count on one hand how many times I heard that it happened for another agent.
Enjoy the funny video below on open houses.