Real Estate Marketing & Beyond
As you drive through Any City, USA, on any given weekend, everywhere you turn there are open house signs. Colorful balloons and streamers are trying to catch your attention to pull you into that house for sale. But there is really a shocking truth about open houses every seller should know.
Open houses for decades has been a mainstream method to secure a buyer for a seller's home. Mr. and Mrs. home seller stay up all Friday and Saturday night in a cleaning frenzy. They ack up the dog and the kids and try to find a few hours to patiently wait out the open house. Meanwhile there are high hopes and anticipation of an offer!
But there has been a shift in the past 15 years in how buyers shop for homes. With Zillow opening its doors in 2006 and the smart phone debuting in 2007, home shopping is become all about the internet. So are open houses really necessary to sell your home?
The real estate community will be divided 50/50 on whether open houses are necessary or not and I am sure there will be much debate about this article. But many of the defenders of open houses also have an ulterior motive.
Lets take a look at some of the shocking truths about open houses.
Industry statistics show that less than 3% of all homes are a direct result of an open house.
Given all the signs you see for open house on any given weekend you would think statistically open houses would be much more effective.
Let's think about it for a moment though. If a buyer is truly interested in a home, they aren't sitting around waiting for an open house to see if it suits their needs. They are calling their buyer's agent and scheduling a personal showing as soon as they can.
If there is no open houses scheduled they aren't walking away from the home, they are getting in to see if your home will be the one by scheduling a personal showing.
Ok, here is a biggie. Very few of your open house attendees are true buyers for your home. A true, qualified buyer is someone who can close on your home in the next 60 to 90 days.
Yep... your house is being used to kill time, satisfy a curiosity, feed a daydream and more...
The neighbor who doesn't want to sign in they just want to see your kitchen remodel,
Or, the couple killing some time before going to a family barbecue because they are a little early,
Or, the mom who is hoping she can talk her kids into moving into her neighborhood,
Or, the buyer who can't buy right now due to lack of down payment bad credit or some other reason that is preventing them from buying,
Or, the buyer who is out and about in a cheaper price range and saw the sign but can't afford your home.
That and more.... as agents we have heard every excuse in the book of why they are at your open house, when they are really not qualified buyers.
So you are that seller that spent hours cleaning and then dealing with kids that don't want to leave with the house. Your agent calls and they said they are done with the open house. There were 8 groups of buyers coming through. Your think GREAT, there is hope of an offer.
But your agent doesn't tell you, or they may not even know.... most of those attendees were unqualified to buy your home. Really, the only qualification to attend your open house is they can get there and walk through the door!
More and more we hear about crimes that happen as a result of an open house.
Your opening your home to the public. Basically anyone that wants to come can come. As you open your home for an open house your are also opening your home to crime.
Half the attendees don't even want to sign in and are cagey about avoiding signing in. Who knows if they are even leaving proper information. On top of it your agent can be in three places at once watching what is going on.
Open houses are a good opportunity for crime.
Here's the rub. Open houses benefit the listing agent more than anyone. There two reasons why.
First, it shows a seller activity. I find agents without a strong listing plan love open houses. Putting up signs, calling to update you, spending hours signing in a few buyers.... It is highly visible activity to a home seller yet there are much less visible activity that can have greater results.
Second, open houses are a chance for an agent to brand themselves and market themselves to buyers and sellers. It gives them something to advertise on Facebook and signs go up all over town for a few hours.
It is an opportunity for an agent to get their name out there.
Better yet. Future buyers and sellers are showing up at your open house. I can't tell you how many times I have booked a listing appointment for an open house from a neighbor wanting to sell!
Future business! Any potential buyers that have rejected your home now a potential new client as well.
So this is where a lot of agents defend open houses. Open houses are a key way to get business for themselves or their company.
I get it, I certainly won't turn down an opportunity if it presents itself. But a listing agent has a fiduciary responsibility to the seller.
Which means they are there to sell your house not secure future business.
Your listing agent should set realistic expectations for open houses to begin with. I let all my sellers know, that very few attendees will actually be qualified to buy. And if they still want to do open houses, we strategically schedule them.
I am not saying you shouldn't have open houses. But that is a conversation you and your agent should have. There are risks and rewards to be discussed. Even regionally open houses do better in some markets than others.
After you have read this article you probably get the jist of what I am saying.... open houses just aren't exactly what you thought.... throngs of buyers just ready to buy your house. Come on think about it, how many times have you gone into an open house with no intention of buying?
Could a potential buyer walk through the door? Of course. But that buyer would schedule a showing anyways if there wasn't an open house scheduled. A serious buyer is not going to wait.
Just be realistic about what an open house is and is not. There are certainly times when an open house can be beneficially, especially in a hot sellers market and the home is brand new to the market.
But, when your house isn't selling and no one is scheduling showings, more open houses are not the solution, it just looks desperate.
Many sellers are actually relieved when I discuss open houses with them and I tell them we won't be doing open houses weekend after weekend. It is less work for them.
Not having an open house will not prevent your home from selling. In many ways the quality of photos and the amount of information about a home on the internet, has taken away a huge need for open houses. The internet has minimized the need for open houses.
