One of the more strange points of contention in the world of real estate is open houses. How does something so simple result in so many different opinions?
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Today, I want to take you on a journey to discover the bottom line truth about open houses using some common sense – which frequently seems to be left out of the discussion – and 30 plus years of experience from a real estate professional (That’s me!).
The Common Points About Open Houses
The argument against open houses usually goes something like this. First, buyers today use the internet to browse for homes and narrow down their choices. One little nugget they like to use to support this claim is that a National Association of Realtors survey found that only 7% of buyers found the home they bought by visiting an open house. Next, and probably the most commonly used point by real estate agents in listing appointments is that open houses are really more about Realtors getting new clients at open houses and far less about selling the home. A line home sellers might frequently hear is “I have never seen or heard of someone selling a home at an open house!”. Finally, the idea that theft is a major downside to open houses where visitors can steal jewelry or other loose items or perhaps even check out the property for a future break in.
Common But Not Convincing
All that sounds pretty reasonable, right? In reality, it only holds water if you accept their definition of what an open house is supposed to be. So let’s refer back to that National Association of Realtors study. Read that line again, carefully.
… only 7% of buyers found the home they bought …
So consider that for a moment. Of course buyers do not FIND the home they buy using an open house. This assumes that the open house is the first exposure a buyer has to the home and not only is that not correct, it has NEVER been correct – even before the internet. An open house is not the opener to getting the notice of buyers, but it is a way to let them conveniently get access to the home for viewing. Open houses are a viewing tool. At its core, an open house is a scheduled period of time in which interested parties can view a property that they have interest in. They likely found the home on the internet, liked the information they saw and then decided to use the open house as a way to get a look at the inside. So the open house is about access, not introductions.
Easy To Show Makes It Easier To Sell
As I have covered in past podcasts, videos and Coffee & Real Estate Live Chats, the home that is easiest to show is the house that will get shown first and most often. By offering an open house, buyers do not have to set a time and try to wedge it into seeing a number of other properties. They avoid having to view the home with their real estate agent, which leaves them the freedom to be more frank with themselves and other family members about their thoughts about the property. In fact, this even allows buyers to come back multiple times in the same day if they want. Since an open house usually lasts for 5 or more hours, a buyer could go view another home then want to get another look at your open house to refresh their memory. The longer a buyer spends looking at a home, the higher the probability that this buyer will make an offer. If they start pulling out measuring tape, then you really know that their interest is peaked!
Is It Really A Better Tool For Agents To Get Clients?
Then there is the idea that an open house is more for the benefit of agents than for sellers. Perhaps, but does that mean it has no value for sellers just because it has value for the agent? If done right, an open house can benefit everyone involved – buyer, seller and agent. Despite this claim, agents usually use this point to try and prevent an open house from being on the to-do list. The truth is that most agents hate doing open houses. If you hire an agent that employs a team, you can bet that a member of their team (the lowest on the totem pole) will likely be the one that gets the job of holding the open house. Why? Because while agents may get buyer clients at an open house, it happens only a little more often than agents sell a home at an open house. Most buyers that visit an open house are already working with an agent. If this truly was something that netted a good stream of buyers who need an agent, Realtors would be clamoring to be the one to hold the open house, and they are not.
The Valid Concern
Finally, the idea that open houses can lead to theft. Yes, an open house does present the opportunity for that to occur. This is why a good agent will work with sellers to prepare their home for open houses. Review strategies to make the open house as frustration free as possible. As someone who has been a real estate professional for over 30 years and hosted probably hundreds of open houses – including many for other agents – I have NEVER had someone visiting during an open house steal something. Of course, that does not mean it can’t happen. I have no doubt that it does. However, I would argue that the benefits outweigh the risks and by exercising just a little risk management, you can mitigate the issue effectively.
Some Real World Observations
So with all that in mind, let’s talk a little about my real world experiences with open houses. First, I have sold a home in an open house before. By that, I mean a buyer came to view the home, decided to buy it, did not have an agent and we wrote the offer right there in the kitchen of the home being held open. Given my years in the business, I would not call this a common experience. I would ballpark this as happening 4 times in my career… which began in 1988. So don’t hold your breath when it comes to selling a home in the open house! But let’s focus on the real pay off. How many times have I sold a home to a buyer that viewed the home during an open house? There is no way to pin this number down completely, but I would estimate it to be at least 70%.
Doing Open Houses Right
Of course, like everything else, the effectiveness of open houses is wrapped up in how well it is executed. A good open house is marketed to the world at least 7 days before it is set to occur. Multiple methods should be used to advertise that the open house is coming up – not just the MLS system. In the modern world that means social media, eMail campaigns and even direct mail. Since the VAST majority of real estate agents stop at entering their open houses into the MLS system, you can begin to understand why some may find open houses to be less effective than hoped for.
Some Final Thoughts
So where does all that leave us? Well, first, do not let someone try to define what an open house actually is as something it is not. Understand that it is a tool to make your home as easily viewable as possible. Expect from the open house only what is reasonable – that buyers can use it to view the home – that’s it. If for whatever reason you list your home and require lots of conditions and advanced notice for someone to view your home – the open house becomes even more critical to getting your home seen by buyers and ultimately sold. Discuss precautions you can take to protect your belongings during an open house. As part of the staging process, I will frequently suggest that personal documents, valuables, etc. get packed as much as possible which limits the exposure to potential issues relating to open houses. Open houses are a valuable tool through preparation, precautions and superior execution. Don’t let yourself get convinced that it has not part to play in successfully getting your home sold!