Open Houses - The Simple Truth

One of the more strange points of contention in the world of real
estate is open houses. How does something so simple result in so
many different opinions?

Today, I want to take you on a journey to discover the bottom
line truth about open houses using some common sense - which
frequently seems to be left out of the discussion - and 30 plus
years of experience from a real estate professional (That's me!).
The Common Points About Open Houses

The argument against open houses usually goes something like
this. First, buyers today use the internet to browse for homes
and narrow down their choices. One little nugget they like to use
to support this claim is that a National Association of Realtors
survey found that only 7% of buyers found the home they bought by
visiting an open house. Next, and probably the most commonly used
point by real estate agents in listing appointments is that open
houses are really more about Realtors getting new clients at open
houses and far less about selling the home. A line home sellers
might frequently hear is "I have never seen or heard of someone
selling a home at an open house!". Finally, the idea that theft
is a major downside to open houses where visitors can steal
jewelry or other loose items or perhaps even check out the
property for a future break in.
Common But Not Convincing

All that sounds pretty reasonable, right? In reality, it only
holds water if you accept their definition of what an open house
is supposed to be. So let's refer back to that National
Association of Realtors study. Read that line again, carefully.


… only 7% of buyers found the home they bought …


So consider that for a moment. Of course buyers do not FIND the
home they buy using an open house. This assumes that the open
house is the first exposure a buyer has to the home and not only
is that not correct, it has NEVER been correct - even before the
internet. An open house is not the opener to getting the notice
of buyers, but it is a way to let them conveniently get access to
the home for viewing. Open houses are a viewing tool. At its
core, an open house is a scheduled period of time in which
interested parties can view a property that they have interest
in. They likely found the home on the internet, liked the
information they saw and then decided to use the open house as a
way to get a look at the inside. So the open house is about
access, not introductions.
Easy To Show Makes It Easier To Sell

As I have covered in past podcasts, videos and Coffee & Real
Estate Live Chats, the home that is easiest to show is the house
that will get shown first and most often. By offering an open
house, buyers do not have to set a time and try to wedge it into
seeing a number of other properties. They avoid having to view
the home with their real estate agent, which leaves them the
freedom to be more frank with themselves and other family members
about their thoughts about the property. In fact, this even
allows buyers to come back multiple times in the same day if they
want. Since an open house usually lasts for 5 or more hours, a
buyer could go view another home then want to get another look at
your open house to refresh their memory. The longer a buyer
spends looking at a home, the higher the probability that this
buyer will make an offer. If they start pulling out measuring
tape, then you really know that their interest is peaked!
Is It Really A Better Tool For Agents To Get Clients?

Then there is the idea that an open house is more for the benefit
of agents than for sellers. Perhaps, but does that mean it has no
value for sellers just because it has value for the agent? If
done right, an open house can benefit everyone involved - buyer,
seller and agent. Despite this claim, agents usually use this
point to try and prevent an open house from being on the to-do
list. The truth is that most agents hate doing open houses. If
you hire an agent that employs a team, you can bet that a member
of their team (the lowest on the totem pole) will likely be the
one that gets the job of holding the open house. Why? Because
while agents may get buyer clients at an open house, it happens
only a little more often than agents sell a home at an open
house. Most buyers that visit an open house are already working
with an agent. If this truly was something that netted a good
stream of buyers who need an agent, Realtors would be clamoring
to be the one to hold the open house, and they are not.
The Valid Concern

Finally, the idea that open houses can lead to theft. Yes, an
open house does present the opportunity for that to occur. This
is why a good agent will work with sellers to prepare their home
for open houses. Review strategies to make the open house as
frustration free as possible. As someone who has been a real
estate professional for over 30 years and hosted probably
hundreds of open houses - including many for other agents - I
have NEVER had someone visiting during an open house steal
something. Of course, that does not mean it can't happen. I have
no doubt that it does. However, I would argue that the benefits
outweigh the risks and by exercising just a little risk
management, you can mitigate the issue effectively.
Some Real World Observations

So with all that in mind, let's talk a little about my real world
experiences with open houses. First, I have sold a home in an
open house before. By that, I mean a buyer came to view the home,
decided to buy it, did not have an agent and we wrote the offer
right there in the kitchen of the home being held open. Given my
years in the business, I would not call this a common experience.
I would ballpark this as happening 4 times in my career… which
began in 1988. So don't hold your breath when it comes to selling
a home in the open house! But let's focus on the real pay off.
How many times have I sold a home to a buyer that viewed the home
during an open house? There is no way to pin this number down
completely, but I would estimate it to be at least 70%.
Doing Open Houses Right

Of course, like everything else, the effectiveness of open houses
is wrapped up in how well it is executed. A good open house is
marketed to the world at least 7 days before it is set to occur.
Multiple methods should be used to advertise that the open house
is coming up - not just the MLS system. In the modern world that
means social media, eMail campaigns and even direct mail. Since
the VAST majority of real estate agents stop at entering their
open houses into the MLS system, you can begin to understand why
some may find open houses to be less effective than hoped for.
Some Final Thoughts

So where does all that leave us? Well, first, do not let someone
try to define what an open house actually is as something it is
not. Understand that it is a tool to make your home as easily
viewable as possible. Expect from the open house only what is
reasonable - that buyers can use it to view the home - that's it.
If for whatever reason you list your home and require lots of
conditions and advanced notice for someone to view your home -
the open house becomes even more critical to getting your home
seen by buyers and ultimately sold. Discuss precautions you can
take to protect your belongings during an open house. As part of
the staging process, I will frequently suggest that personal
documents, valuables, etc. get packed as much as possible which
limits the exposure to potential issues relating to open houses.
Open houses are a valuable tool through preparation, precautions
and superior execution. Don't let yourself get convinced that it
has not part to play in successfully getting your home sold!