Everyone has an opinion on the effectiveness of open houses. They can be an effective way for agents to prospect and sometimes people see a house at an open house that they end up buying. Everyone has a story, including me about someone who walked into an open house and bought the house.
Among real estate agents those who do open houses say they sell houses. Those agents who don't do open houses say they are not necessary if the goal is to sell the house.
There are no numbers that I can find anywhere on what percentage of homes sell through an open house. Another interesting number would be the number of homes held open on a given Sunday expressed as a percentage of the total number on the market and then the percentage of those opens that resulted in a sale. It would also be nice to compare the total number of offers on homes that had opens with the total number of offers on all homes for the same period. I love data!
I asked some neighbors of mine who bought their house through one of my open houses if they would have bought the house even if there had not been an open. They said they would have, in fact they had made an appointment to see it the following Monday. They first found it on the internet and it was on their list of homes to see. They had been house hunting for awhile.
There are many homes that are never open for an open house and they sell, there are also homes where there are open houses but the house doesn't sell and is taken off the market.
Some sellers don't think their agent is working very hard if he or she doesn't do open houses and I know several agents who do open houses just because it looks good to their clients. The point of the open is that it is visible to everyone. It makes the sellers feel like they are getting value even though they have not paid the agent a dime. The opens help agents meet potential buyers and sellers and sometimes buyers find the right house at an open house. I am just not sure if they buy only because of the open house or if they would have bought it anyway.
So far I have not found a serious buyer who will only buy a home that has open houses but there are probably some buyers like that. They may not understand that they can see a home most any time.
There was a time when the only way people could find out what is on the market was through an agent, or an open house or a for sale sign. That is no longer the case and I have talked to buyers who never went to an open house.
A lot of people have opinions on what it takes to sell a house. There are more experts on the subject than there are houses that have sold. Some of the opinions seem to be influenced by marketing from the real estate industry. Many of my opinions come from my experience and as time goes on and the market changes so do my opinions.
I wish there were some statistics on how many homes are sold through opens. For now there are just opinions and everyone has one. I like real facts, supported with data.
For sellers it is probably best to work with an agent who has the same opinion as you have. When interviewing agents ask them if they will do open houses. There is less friction in the relationship that way. Don't let an agant talk you into or out of open houses. It is your house, you will pay the comission so ask for what you want. I don't do open houses and am honest with my clients about that. Some agents that I work with will do the open houses for my sellers if the need arises and they are better at it that I am.
To be honest with customers is the best way to get business for any real estate agents. Dishonesty can only get you business for once not repeatedly.
One of the other comments that you’ll hear from people is that “the only benefit to holding a house open is for the agent to get leads.” While it may seem that way, I have found that not to be the case. I made a concerted effort over a 6-month period of time to hold an open house every weekend, whether it be my own listing or another agent’s listing. The result? 1 new buyer. That’s not a high ROI…
Most people who come through open houses either have their own agent, or “claim” to have their own agent because they don’t want to be jumped by the Realtor who is hosting the open house.
In the final analysis, though, I think agents still need to hold their listings open as often as possible. There are still buyers out there who have a bias against listings without pictures on the MLS! So you can imagine that these buyers won’t take the effort to see your listing if it’s “by appointment only.” Just like a good set of photos and a virtual tour, it’s important to make the home as accessible as possible.
Just my $0.02…
I purchased my house in 2008 because of an open house. I probably wouldn’t have seen it otherwise.
Dan- were you looking for a house at the time? Did you look at more than one? Were you working with an agent or searching the internet for homes for sale? I would like to learn more.
I think many buyers like going to open houses for the experience, and because it helps them see things in houses they want and do not want. It’s also less pressure than scheduling a showing with an agent, where we always had in the back of our mind, “Are we becoming nags and time-hogs for our agent?” (not every buyer thinks this way, but we did).
The act of actually walking through an open house helped us better refine our criteria. for example, it solidified our desire to avoid a bungalow; nice as many are, they just felt too small for us, and after seeing enough of them, we stopped looking at them.
I know this doesn’t answer the question about what the ROI is for listing agents and open houses. But for buyers, and the industry as a whole, there is inherent value in how it enhances the overall home-buying experience. And if the seller wants one and feels better about paying the commission accordingly (irrespective of the outcome), then there’s value there, too. Perception often equals reality.
It would be a while before I go for any kind of buying or selling either it is an open house or whatever. Don’t you think it just not the right time for investing in the real estate or it is just that I am perceiving the situation differently and the recession is over.
I concur with Rich Bailey – when we were first-time buyers, open houses were essential for us in figuring out what we wanted, what the market was like, what kind of house we could get in our budget, etc. And it did feel good that we weren’t hogging our real estate agent’s time when we looked at these places, especially when we went into an open house with the understanding that it was highly unlikely we’d want to make an offer, but that instead our goal was simply to educate ourselves. How this benefits the seller is another issue, of course.
I bought my most recent home through an open house. It was a block from my previous one and curiosity got us in the door. We weren’t actively looking until we noticed it was for sale and fit our needs. It was the only home we seriously looked at.
I know it works that way for some. I just wish I had some numbers
Saskia – it doesn’t do anything for the sellers but you did the right thing. Look at as many houses as you can. As an agent I have to say it is never a “bother” to show a house but I understand your attitude.
it’s one of those things that you gotta say it can’t hurt. open houses definitely bring in people who may not have seen that house while searching online or whatever other method they tried. it’s a pretty painless process and definitely can work out for the better.