Do People Still Do Open Houses?
The short answer is yes. The better questions is: why?
A Recent Experience
Unfortunately, this experience is all too common.
The home seller would like to have an Open House scheduled. Why? Lots of reasons but more on that later. Open House scheduled. Sunday 12:00 (noon) to 3:00pm. Sure. It could be 1:00 to 4:00 or 12:00 to 4:00 or any block of time you see fit but the tradition is Sunday afternoon. More on tradition later.
The advertising:
- e-mail fliers to 2227 Realtors working in the most immediate 20 mile radius of the house. These are the Realtors most likely to have potential home buyers that might be interested in the house. Additionally, these are the Realtors most likely to be interested in homes that are currently on the market in the event they have an out-of-town client of just want to stay informed about the market.
- Open House announcements go into Realtor.com and every other real estate centric webs site that Joe and Jane Home Buyer are looking at when searching for a home to buy.
The Preparation:
- the home sellers, to their eternal credit, prepare by making the home look like a picture from a magazine, they lay out a nice food spread — cookies, brownies, popcorn, a cake, bottled water, coffee….the works. They even made little Thank You boxes filled with goodies to give to people who came by.
- the Realtor advertised a drawing for a $100.00 gift certificate (see fliers to Realtors, above). If you came by and put your name on the piece of paper that came by you had a chance to win $100.00 through GiftCertificates.com that could be used virtually anywhere.
The Result:
Two sets of people came by during the three hour period —one young woman who had read about it on Realtor.com and two guys (would be real estate investors) who saw the notification on Redfin.com. No Realtors either by themselves or with potential home buyer clients. Pretty poor showing.
Why Open Houses Don’t Work
Lots of home sellers like the idea of Open Houses because of the tradition. You see, in the pre-Internet and pre- Buyer Agency days, Open Houses were a great way to get people to see your house. There weren’t any Virtual Tours that people could see on the Internet, there weren’t Buyer Agents that could take you to see any house you wanted any time you wanted to see it based on your own schedule. You see, a Buyer Agent can show you the house almost anytime. It’s like your own private Open House.
Traditions die hard. There is some glimmer of hope that some potential home buyer some where did not realize your home was for sale or, maybe, they haven’t gotten around to getting their own Realtor yet and are just kinda looking a houses to get ideas or get motivated to buy one. When they see your house, they’ll really like it and want to buy it or run back to a Buyer’s Agent and put an offer on your house.
Some Homes are Sold At Open Houses
About1 % of all homes sold are sold as the result of an Open House. This means, of course, that 99% are sold other ways. But, for that 1%, it means that:
- they probably don’t have a Realtor and are just looking and really do get swept up in the moment,
- they have a Realtor but their Realtor was too lazy to go around on a Sunday afternoon looking at houses with them,
- they have a Realtor they don’t trust to show them all the really good houses so they sneak out on a Sunday afternoon to look at Open Houses,
- they have nothing better to do on a Sunday afternoon and they like Open Houses better than a movie or the museum,
- they are the neighbors looking for decorating ideas or want to see your place to compare it to their place.
The bottom line is that their is really only one good reason Realtors have Open Houses. It’s so they can possibly run into someone who is unrepresented by another Realtor and who might be interested in using their services. In other words, it’s a great way to prospect for new business.
It’s also a great way to have a party. A good Realtor (and good home sellers) will lay out the spread like the home sellers at my recent Open House and invite everyone in. The only problem is that you never know who is going to show up or if anyone is going to show up.
March 15th, 2010 at 9:33 am
I think that in 16 years, I’ve sold only one of my listings directly through the open house. I have had buyers come through without their agents and they’ve ended up buying the house, but they would have seen it anyway because their agent would have shown it to them. I know, because they always say “we were supposed to see this next week, but we saw that it was open today!”.
So your article is spot-on. EXCEPT. I really dislike this “their agent was too lazy” meme that always seems to follow this topic. Maybe their agent was out with other buyers. Or had a family emergency (that was me on Saturday), or the buyers said they couldn’t look at houses this weekend and then their plans changed. I find that laziness is not the most typical reason that agents aren’t with their buyers – most buyers don’t even let their agents know they’re “out there” looking. Asking some buyers to skip open houses is like asking them to not breathe.
Yes, some agents are lazy, but it seems a shame to tar and feather us all with that label so casually.
March 15th, 2010 at 9:44 am
Maybe it was because I was in a bad mood or disappointed or something or maybe it was because one of the two people that came by actually said they had a Redfin agent. Perhaps there was an emergency or any number of the other legitimate reasons you stated. Or perhaps it’s because the agent says “here’s a list of Open Houses, if you see one you like, let me know and we’ll write an offer on it.”
I actually know listing agents that, back in the good old days, would disclose in their Open House marketing that agents that did not accompany their buyer clients to the Open House would be getting a referral fee. Presumably, the buyer would pick up the rest of the buyer’s agent’s commission. TO do that in this market would be ridiculous, of course.
All that said, your point is a fair one and well taken. A lot of Realtors are conscientious and thoughtful as well as thorough and competent. There are a lot of buyers that do sneak out and look at houses because they don’t trust their agent.
I’ll try to mend my ways.
March 15th, 2010 at 11:07 am
Okay, so you had a disappointing day and I’m feeling a little touchy because I had to cancel showings this weekend due to a death in the family. Oh yeah, and we’re both cranky because of the time change. I had a buyer who didn’t want to bother me because of the family crisis and felt that “just this time” it would be okay to call the listing agent directly to see a property. Fortunately, I was able to call the listing agent and step in to show.
There ARE a lot of lazy agents who just give out the list. I just had a visceral reaction to the word ‘lazy’ as applied with a broad brush
I think I still owe you cookies.
March 15th, 2010 at 12:04 pm
I have been told by one of my top producing colleagues that they do open houses to pick up LISTINGS!! I find this quite a stretch to believe, but he says he has had great success with this strategy. I also think in different parts of the country, different traditions live on….
March 15th, 2010 at 2:55 pm
Actually, I do get listings from open houses. A lot of sellers are out there shopping for an agent.
March 15th, 2010 at 3:03 pm
I think I may have gotten one listing from an Open House. It was from an neighbor of the person whose house I held open and called me almost 6 months later. Generally, I either get the neighbors that drop by or virtually no one. Yesterday was an example of just a couple of people. But it was rainy, cold, and it was a condo and not a single family home. I wish I could say I get lots of positive stuff from Open Houses but I never do.
More to the point, they really don’t benefit the Seller which is ostensibly the whole point of an Open House. If Sellers knew their Realtor was eager to hold the house open only to attract more clients for him/herself they’d probably have a different point of view.
March 18th, 2010 at 10:21 am
For what it’s worth, when I was house hunting a few months ago, I would scour the online listings first – skipping over listings that didn’t have pictures – then I would consider going to an open house at the property.
I’m a member of the millennial generation, and I use Google for everything. I recently wrote a piece about Google for real estate agents. And I liked your article so much, I wrote about it too.
Have a great day!