Do Open Houses Work?

For many homeowners, open houses are a popular event and many sellers request that they perform them. But the question remains, do they actually work? What are the odds that your home will sell at an open house? Who really benefits by doing the open house, you or the real estate agent? These are questions that you must ask yourself before you decide to make your agent schedule one, and this article will clear up some of the confusion and misconceptions that are associated with open houses.

As a seller, open houses appear to be an integral part of the home selling business. This is not necessarily true. In my lengthy experience as a real estate agent, I have never had a home to sale as a result of an open house. It's a way for lookers, not buyers, to kill a few hours on Sunday afternoon and see some nice homes. Start off by thinking about who attends the open houses. Most people who visit are directed to the house by the directional signs located throughout the community. This means they don't have much information on the home when they pull up to the driveway. Even though all open house attendees are prospective buyers, they may not be well qualified if they haven't started working with an agent or mortgage broker. They could come in the house and realize they can't afford it, or that they need something with more or less space.

Also, if a listing is open to the public it's hard to keep track of who's been in the house and there's really no need for the buyers to view the home further. The most productive showings occur when a property is scheduled for private view. Buyers like to tour the home without the constant watch of the seller or listing agent so that they can feel free to open doors and investigate possible problems with the structure. For instance, if you're driving a car would you rather discuss your feelings about the vehicle privately with a friend or would you rather the sales agent stand right there with you?

So who is the biggest beneficiary of the open house? The listing agent gets the most production from the open house, not the homeowner. Open houses give an agent the opportunity to meet prospective buyers that are in the beginning stages of buying a home. Most buyers that go to open houses are not working with real estate agents, therefore it's a great chance for the listing agent to get in front of them in a non-threatening environment to introduce themselves. Open houses are a great source for future business, and if you ask most real estate agents they'll tell you that the majority of their leads were picked up from an open house session. That's not the type of thing you want to hear if you are a homeowner.

So why do so many homeowner's demand their agents schedule an open house? It's simple. Up until this point the seller has not seen the agent do any work. The listing contract was signed, the agent took a few photographs of the property, and they disappeared with the exception of a phone call every Friday to touch base with you. If a seller demands an open house, they'll know for sure that the agent is at the house for a designated period of time, usually four hours, and that during that time they're doing nothing else but trying to sell the home. Many sellers don't see the advertisements an agent has set up and they certainly don't see the amount of emails and phone calls we place in order to spread the word. Open houses give sellers something back that they crave: Control.

If you're still asking yourself what else you can do besides open houses that will create traffic for your home, then stop worrying. I have your answer. Instead of doing an open house for prospective buyers, have an open house for other real estate agents. These are often referred to as Realtor Luncheons. A Realtor Luncheon is an event that is catered and sponsored by the listing agent of a property and is open to any broker. Brokers will show up to the door, take a tour of the property, and are served a nice catered lunch. They're able to eat in the privacy of your home which will create a subconscious bond with the property. After all, all of the serious buyers in your area are working with real estate agents and the agents are the ones that will be selling your home. It's a matter of simple math. If you're doing the traditional open house and only three buyers come through the door, you've only exposed it to three individuals. During a Realtor Luncheon, any agent, on average, is working with five buyers. If fifty agents attend the luncheon, then you've opened the door to 250 possible buyers. It's also a great way for agents to create fellowship between one another, and if an agent comes across a buyer that is looking for a home in your price range they'll automatically think of the home they once attended a luncheon at because they already know the property inside and out. By exposing a listing to more agents, you increase the number of potential buyers. Ask your agent to schedule a Realtor Luncheon instead.