How Effective Are Open Houses?

The biggest complaint home owner's have who are selling or who have sold their house is that their agent didn't hold enough open houses, or any at all. This will lead them to believe their Realtor was not doing the job they hired them to do. When it comes to open houses, you're probably not going to find a lot of busy, successful real estate agents holding them. In fact, most agents will hold an open house just so their client doesn't complain. Here's why.

Less than 1% (much less than 1%) of homes will sell during an open house. This is because the people that actually go to them are just beginning their search and aren't ready to buy yet .For most buyers, going to an open house is one of the first things they do. In fact, it's probably the first house they've seen. You'd also be surprised at how many neighbors go to the open house who aren't even interested in buying, nor do they have a friend or family member who is. They're generally just nosy and taking advantage of the fact that the owner isn't there to see the inside. I actually had a neighbor come to an open house who had the same exact floor plan and wanted to see how the owner's placed their furniture to get ideas.

Most of the visitors aren't even pre approved for a mortgage yet. So, even if they are interested, there's no telling whether or not they'll be approved. Another drawback is most people that enter open houses go in because they drove by and saw the open house sign. When they enter the house, they don't know the price and there's a good chance it will be out of their price range. There are also people who enter open houses to steal things. I can go on pointing out the reasons why people that visit an open house have no intention to buy. But, the point is you want qualified buyers coming into your house who have a peaked interest.

Another thing home owners complain about is if their agent did hold an open house, it wasn't advertised. Well, most people looking to buy a house (over 85% actually) start their search online. They're not really looking for open houses. They're searching agent websites for listed houses. I've done over 100 open houses. Every time someone walks in, I'd ask how they found the house. Never ever did they say they read about it in the paper (if it was advertised). Most agents see it as a waste of money.

Lot's of real estate agents will actually designate another agent in their office to hold it. New real estate agents typically like to hold open houses. Why? Because it's a great way to get some clients. A lot of agents will use the opportunity to find people just starting their search. People who go to open houses typically aren't working with an agent already.

So, if they are serious about wanting to buy something and they walk into the house and it's either out of their price range or not what they're looking for, it's a great opportunity for the agent holding the house open to say, "What exactly is your price range and what are you looking for?" The visitors tell them and the agent says, "Alright. Well, there's this house a few blocks over that sounds perfect for you. How about we meet next weekend and I'll show it to you?"

Actually, the agent will probably have their laptop with them to show the prospective buyers other homes they may be interested in. This isn't to dissuade them from buying your home. But, if the buyers walk into a house not knowing the price and estimating a $200,000 price range and you're asking $250,000, they're not going to buy it. So, the agent will show them homes on their laptop that are $200,000. Many, many agents get their first client and sale by capturing a buyer at an open house and that house is not the one they sold. This is what I did when I first got my license. Sure, I would have loved to sell that home. But, nobody that came in was interested in that particular home.

Can you sell a house at an open house? Sure. It's definitely possible. I'm not saying it isn't. But, take this into consideration before taking your Saturday or Sunday afternoon to get out of the house for your agent to hold it open.

The best open houses are agent open houses where it's exclusive to real estate agents. Only Realtors may attend. Why is this better? Because the agents are the ones with the qualified buyers who know their client's price range and exactly what they're looking for. Another thing I've seen work is open house parades. This is where the agents that have the listings in a specific neighborhood (it doesn't matter which company) get together and have all the homes open at the same time. They collaborate to get the word out to the other agents in the area and split the cost of advertising. This works well because you're showing people all the homes in a specific neighborhood that are for sale at the same time. So, anyone considering that neighborhood is sure to go. These are the kinds of open houses you should talk to your agent about.