Do Open Houses Work?
January 17, 2009
The answer to this question isn’t so simple. In a normal or healthy real estate market Open Houses are one of the least effective marketing tools a listing agent can employ. And it only gets worse. In a declining or paralyzed real estate market, such as we’re currently experiencing in the Tampa Bay area, Open Houses are a complete waste of time.
So why do Realtors do Open Houses?
We do them because sellers insist we do them. Home sellers are under the impression that Open Houses actually work, and the Realtor that refuses to waste his or her time doing Open Houses will soon have a disgruntled seller on his or her hands. Realtors do Open Houses to appease sellers.
You’ve heard of someone who sold their house at an Open House?
Yeah, me too. And I’ve also heard of someone who tried to remove their own spleen with a spatula. Ok, I made that part up, but you get my point….I hope. Actually selling a home at an Open House is a rare event. So rare that it borders on a freak incident.
The REAL reasons why Realtors do Open Houses
1. Realtors have to appease sellers.
2. Realtors use Open Houses to find buyers.
3. Realtors use Open Houses to find sellers.
What do you think happens when a visitor comes to an Open House and discovers the home doesn’t fit their criteria? Do you think the agent holding the house open simply thanks them for coming and says bye? No chance. Realtors do their best to then capture the contact information of these potential buyers and then flip them to other properties. Your house has essentially served as bait to catch buyers.
And then there are the nosy neighbors. While the home seller is away (allowing the listing agent to hold the Open House) several extremely bored and overly nosy neighbors will wander over to investigate. They’re there to critique the decor, floor plan and furnishings. Oh, they’ll pretend to be interested in buying the home, but a good Realtor knows the right questions to weed out the nosy neighbors from the qualified genuine buyers.
The moral of the story is that Open Houses are a tool for agents to find new clients. In the miraculous situation where a qualified buyer actually walks through the door and wants to purchase the home then the Open House turns out to be a win-win-win for all. But the odds are the entire process of holding a house open will be fruitless and a waste of time for the home seller.
Personally, I love to do Open Houses when the market is active. As long as there are buyers out and about I’m content with doing Open Houses just about every single weekend. But my personal ethics force me to be honest with home sellers. I let them know up front that there is very little chance of attracting a buyer and selling their home through the Open House process. If they still want me to hold their home open I do so with a clear conscious that I have not led them on and given them false hope. And I also let them know that if their home doesn’t match the criteria of the Open House visitors I will sell them a different home.
Have I met buyers at Open Houses?
Over the years I have sold at least a dozen homes to Open House visitors, but never have I sold them the actual house where we met while I was holding an Open House. And I’ve met maybe a dozen sellers at my Open Houses and listed and sold their homes soon thereafter. I also don’t know a single Realtor that has held an Open House and sold that property due to holding it open.
(Naturally, the above information pertains to Open Houses in the Tampa Bay market under current 2008 market conditions)