Unveiling the complexities and truths behind one of real estate's time-honored practices, our focus turns to open houses. Are these events essential to house selling? They frequently find themselves entangled in questions regarding their efficacy. Our exploration offers enlightening perspectives for both buyers and sellers as we dissect what really occurs during these property viewings—thought of as a long-time pillar within the realm of real estate.
Do Open Houses Actually Sell Homes?
Many home sellers believe that having open houses on their property is a great way to get their homes sold. When I first started in real estate in 1983, it was stated that only 1% of homes ever get sold via an open house. Some years later I read an article that raised that to 2%. So think about it realistically. I believe more in the 1% figure. That means for every 100 people who go through an open house, only one person (or couple or family) will buy it.
Even at 1%, a seller might think it's worth doing. Now let me tell you a truth most won't divulge. No matter how much I advertised or grouped up with other agents who shared each other's opens that day, we'd be lucky to get a handful of people through. Most of the time it was 1 or 2 people/groups. Sometimes it was zero. How many opens would we have to do to get 100 people through so we might get one buyer? It would probably be sold via the MLS (Multiple Listing Service) before we could reach that amount of open house visitors.
I had an open house across the street from my old house (that I grew up in as a teen). We had over 40 visitors, and I mean groups, not 40 total, so many more people. It was a madhouse. I couldn't control any of the attendees. I couldn't speak to any of them to create a rapport. Did I sell the house that day? Nope! It was sold soon after to a buyer who had seen the house via a private appointment made by their agent. That was all the proof I needed to tell me that open houses really don't sell homes - the MLS does!
So Why Do Agents Have Open Houses?
This might anger many sellers. Agents know that there is a very slight chance that the home they are sitting in for a few hours will actually get sold from the open house. So why do we do it? We're hoping for unrepresented buyers! That means a buyer that isn't already working with another agent.
We realize there is a very low chance that the unrepresented buyer will be interested in the home we're holding open. So we're hoping they will like us, and we usually give them something to remember us by in the hopes they will call us to work with them to buy something else. I prepare a folder with a brochure on the house, some educational brochures about buying, and an introduction to myself. I usually include some kind of small parting gift (with my name and number on it).
Most sellers don't know that some agents will bring a list or full print-outs of similar homes in the neighborhood as part of a hand-out to visitors. That agent wants to be the one showing those buyers other homes, as long as they're not signed up with another agent.
Another reason agents hold open houses is because it's a tangible thing sellers can see happening. It's hands-on, unlike Internet advertising or social media that a seller doesn't see as valuable, and they can't see their agent doing the actual work as it's behind-the-scenes marketing.
In 41 years in real estate, I had one resale house that kind of sold because of the open house, although it's a stretch. A man viewed the house with his agent and was ready to make an offer. He saw that there was an open house so he went back to take his time walking through. After that visit, he went back to his agent to write up the offer. At least that's the story I got. He might have already written up the offer after the showing he had prior with his agent and just happened to spot the open house and walked in. So I can't give that open house much credit as he had already seen the house with his agent and was already interested.
Why Open Houses Are Different for New Construction
Sellers can see brand-new subdivisions build up and they realize that buyers are going through the open model homes. That is what they're expecting by having their one resale house open. It's just not the same. I sold out a new construction subdivision years ago because I wanted to learn about building from the ground up. I learned a lot.
New construction faces the same battle that resale open houses do. An open house is "open to all." We are not requiring pre-qualifications when people come in. We have no idea if they are just curious looky-loos or if they're really ready, willing, and able to buy. I know people who love going through model homes. They have no thoughts of buying. They like viewing the floorplans and the model home decor.
New construction builders hold models open because there's no other way for buyers to see what the inventory is, the pricing (base price and upgrades), the quality, floorplans, products used, etc. Some new construction is listed in the MLS but not all builders list their properties with real estate agents. So the only way the public can see what is being offered is for them to visit the models.
Do Real Estate Open Houses Influence Property Viewings?
Many years ago real estate was handled very differently. There weren't local MLS's on the Internet. When I started in 1983 they were phasing out the MLS "books" as they had a new rudimentary electronic MLS device that provided property print-outs. It was a small box that looked similar to an old answering machine or small fax. It was so long ago that I can't remember how we actually searched for homes on it. There must have been some kind of a keyboard. This was before every household owned a PC. It used "receipt-like" thin paper that turned black in the sun or heat.
Back before the computerized MLS was so popular open houses were a way to get eyes on (and inside of) a house for sale. This allowed individuals an exclusive chance to traverse through the properties unhurriedly, absorbing each detail with ease. Some buyers don't want to bother their agents so will just drive around looking for open houses (or now they can usually find them online).
When I purchased my first house we had to go from one local real estate broker to another, almost like buying a car. The difference was that we were looking for a resale house, not an automobile that was churned out on an assembly line. Each brokerage had print-outs of only their own inventory posted on their office walls and on the front windows. So when they had an open house it was a good opportunity for buyers (and anyone else) to walk through. They were usually advertised in the local newspapers and their open house signs that had brightly colored balloons attached.
So before computerized MLS's existed, buyers enjoyed the journey through homes via open houses because back then a buyer was lucky enough to see a black and white photo of the front of a house in a newspaper or real estate magazine. The only additional photographs were usually black and white and were small unless a brokerage or agent paid a lot of money for a featured page in a real estate magazine. Since home computers were just becoming somewhat popular, there were zero digital walk-throughs available.
Open houses allowed buyers to step into tangible settings where they could envelop themselves in the home's floorplan, imagining life nestled within those walls while scrutinizing subtleties not seen in a few photos. Engaging with real estate professionals on-site at such venues proved helpful by offering immediate answers and insights. But do you think an agent is going to point out the noisy neighbor? The sellers have to fill out a Seller Disclosure Form and the agent is supposed to be transparent about anything that could affect the value of the home held open, but nosy, or noisy neighbors aren't on a disclosure form.
Open houses offered agents the ability to glean critical information concerning both presentation aspects and pricing strategies hinged on visitor feedback gathered amidst these showcases; this input can be instrumental when considering future promotional pivots or necessary adjustments. If only that always happened.
Many buyers will remain mum during the entire showing. They don't want to be "sold." And others don't want to offend the agent by being critical about the property. They either like the house or they don't. You might not get much out of them. That's why I prefer getting feedback from agents who are working with pre-qualified buyers and already have a relationship with them. Then we can usually get good, helpful feedback so the sellers know what buyers are really thinking about the home.
It is easier to understand how open houses were more valuable years ago without home computers that offer great photos, videos, and sometimes floorplans to help you envision a house before stepping a foot in. You'll know from looking online whether a property might work out or not, saving a buyer valuable time.
Some Truths about Real Estate Open Houses
Aren't they becoming obsolete by technological advances such as online listings? Although I realize that nothing matches the palpable sensation one gets from navigating through a physical space that digital platforms can't fully capture, I believe open houses are a dated form of selling a home. As mentioned already, most agents sit at an open house hoping to find buyers as they know the slim chance of getting that particular home sold. Following are some other truths:
1. Real Buyers Will Make Appointments With Their Agents
There is the idea that you can spend as much time at an open house as you need without having an agent trying to push you out of the door, especially if there is a list of homes you have scheduled during a set showing time with your agent. Unless we're on a very tight schedule with a lot of homes to view, I don't rush my buyers. And if we have to get to the next listing quickly, I will also reschedule the home they like so they can spend as much time as they want (within limits - we usually get 30 minutes to an hour per appointment, and that should be enough time for a buyer to determine whether they like the home or not).
Also, if there are other buyers attending, the agent won't be able to spend a lot of time with you answering multiple questions. I've also seen many open houses lasting only 2 hours, and if you get there towards the end (no matter how many hours the house is open) the agent might have to close up, especially if the owners are expecting to come home after the open is finished. Or the agent might have a private appointment scheduled for another place.
2. It's Not Always the Listing Agent Present
Buyers, did you know that it's not always the listing agent sitting at the open house? It could be a rookie agent trying to get a feel for working in real estate, showing property in person, and communicating with buyers (and trying to sell themselves to any buyers not already working with an agent). Even if it's not a new agent, the agent that isn't the listing agent won't have answers to all of your questions, which was one of the benefits of talking to a listing agent at an open house.
3. There Will Be Nosy Neighbors and Unqualified Buyers
The notion persists that properties thrown open for viewing simply entice curious neighbors or idle browsers with no genuine purchase intent—and it's true! An open house is open to anyone that comes through the door. Of course, every individual stepping into an open house can act as a conduit for word-of-mouth publicity, turning local residents into potential promoters who may reach bonafide property seekers within their circles. Will that actually bring a buyer? Do the neighbors truly know what a friend, neighbor, or relative really wants or needs in a property or what they can afford?
I've held multiple open houses in a certain time frame where I saw the same people coming through condos, single-family homes, and luxury homes at all different sizes and price ranges. It was obvious that this was their Sunday Fun Day. It was more than just one couple. People love to walk through other people's homes. They might have always wondered what it looked like inside or how it is decorated. Neighbors might be interested in seeing how their neighbors actually live. These are all the looky-loos that most open houses attract. Some make it a hobby. And in any given open house, these might be the only visitors that show up.
Yet the nosy neighbors are another reason agents hold a house open. An agent that doesn't normally hold open houses might do so in an area they're interested in representing as "the local agent." Or it might be where they live.
In that case, they hold open houses (even if it's not their listing) to meet the neighbors, establish rapport in that coveted area, and have a reason to get back to them in the future. They might start to send mailings out to that area and there's nothing better than to have met the neighbors already. They can then brag about the listing they held open (whether it was their listing or not) when it goes under contract and when it is sold and closed.
There are terms used for an agent to promote themselves in certain areas in a specific area/subdivision. One is called Circle Prospecting and the other is called Farming. This way the residents get to know this agent, especially if they have a successful sale in the neighborhood, and they might be more likely to call that agent when they're ready to buy and sell in the future.
4. Open Houses Can Attract People You'd Rather Not Have In Your House
Addressing concerns regarding security breaches during property viewings: detractors argue they heighten theft or damage risks—anxiety taken seriously by professionals in the industry. Agents have been raped and murdered holding open houses (and yes, it has also happened with regular appointments). The difference is that with appointments the agent should have a phone number in their phone and some kind of contact information with the person they set the appointment with. You won't get this having an open house, even if you have a sign-in sheet. Even if an agent's phone goes missing the law can subpoena the phone servicer to show phone calls made and hopefully, it's not a burner phone. Bottom line, it's easier to put a phony name and number on a sign-in sheet.
I have been nervous at several opens and I always prepared myself to run for the exits. After those incidents, I never sat at an open house alone. Some visitors don't care much about your decorating, but they are interested in what valuable items you might have. I've heard of instances where a group of people come in and one of them unlocks a window so they can return and help themselves. Aren't agents supposed to check locks before they leave? Of course, but most only check doors, not every single window.
Other stories are where visitors with ill intentions didn't unlock any windows, but they wanted to get a view of the floorplan and what the home offered. This way, if they felt it was worth breaking in they would know where everything is. Basically, they attended the open house to "case" the home.
Aren't agents supposed to accompany visitors who attend the open house? If there are multiple visitors at once we can't be with everyone at the same time. Unless you have a group of visitors waiting when you open, you don't take people through as groups. Remember, an agent is trying to impress buyers so they will work with that agent whether they want to buy this house or another one. So the agent wants to be able to speak to each buyer/couple/family individually. Also, female agents alone are trained not to allow a lone male or a group of males to follow her into specific rooms. An agent who is feeling unsafe will stay near a door and let the visitors walk through the house on their own.
As a seller, you might be enraged to hear that an agent would allow this. But would you rather have your agent raped, robbed, or murdered? This is why many agents will refuse to do open houses. The true data of a house being sold via an open house is not worth an agent's life or welfare.
Strategies for Hosting Effective Property Viewings
Conducting effective property viewings is fundamental to orchestrating a successful open house. Central to making sure your house is in it's best light is the art of staging, designed to captivate an extensive array of prospective purchasers. The process entails removing excess items, stripping away personal touches, and strategically arranging furnishings that accentuate the dwelling's prime qualities. Data indicates homes prepped for presentation fetch up to 6% more than their listing price and tend toward sales completing 88% quicker when compared with counterparts devoid of such preparation—a testament indeed to the benefit derived from showcasing properties in their most appealing aspect. Of course, this should have occurred before the house was listed.
Selective timing also plays a pivotal role in amplifying an open house’s efficacy. Optimal scheduling gravitates towards weekends—days saturated with leisure—and zeroes in on afternoon hours as particularly opportune moments for drawing crowds. Seasonal shifts hold sway over attendance too; springtime blooms and autumnal hues mark these seasonal transitions as high tides within the ebb and flow of real estate dealings.
How do we find visitors that will attend your open house? We use our website, social media, invites to other agents via email, invites to the immediate neighborhood, multiple Open House directional signs, and more. We usually put a sign out ahead of time marking the upcoming day and time so people can plan ahead.
How I Promoted Open Houses
Of course, one of the most popular ways of alerting visitors to an open house has already been mentioned. Directional open house signs - as many as possible. Depending on the weather or people (kids) walking by, some signs got blown or pushed down and some got stolen. People still use these today. This method brought in more looky-loos who drive around on Sundays looking for open houses to visit.
Back before computers were popular we ran ads in the local newspapers' "Real Estate - Open House" section. We also ran ads in the free real estate magazines (free for customers, not free for agents). This advertising was very costly and didn't provide many visitors, if any.
Once more people started using computers, a free way to advertise an open house was via our MLS. We could list the date and time and people could see it on most real estate websites (the big ones and locally owned sites, like this one). At the time, our MLS had its own website that people could visit and search and find open houses. I am able to showcase an open house on this website.
I have also sent Open House invitations to some of the neighbors. Although some of them stop in, they are not buyers. As also been mentioned already, we would usually only do this in an area that we really want to work in. This way we want to meet the neighbors and get to know them and if they give us their real names we can put them on our mailing list. This gives us a chance to get our name out in that particular area/subdivision.
One day I had a thought of contacting other agents in a specific townhouse subdivision I had a listing in. A handful of us got together to hold our listings open on the same day and time. We all had print-outs of each other's listings that we handed out to visitors. We all went in together for a newspaper ad so that helped the big expense if only one of us was doing it. We all put signs up in different areas so we had many more signs than if we had done it by ourselves.
The result? The listings towards the entrance to the townhouse complex got more showings than the listings that were deeper in, even though visitors were handed a list of all of the open houses. All in all, with all of the organization and prep it was lackluster. We were hoping for a lot of showings that day, and it just didn't happen. So the townhomes that were closer to the entrance might have gotten one or two more visitors than if that agent had just did an open house for that listing alone, but this was proof that open houses aren't the magic pill that many sellers think. Not one of the townhomes was sold to any of those open house visitors.
Most of My Sellers Don't Want Them Any Longer
Once in a while, I'll get a seller who asks me if I will hold an open house. Depending on the location, I might consider it. But I explain the real reasons we hold them and how low the probability is of the house selling because of one or more open houses. And while we're on the subject, more isn't always better. Fewer people will be interested the more you hold the same listing open.
Others will actually ask me if they have to have an open house. I laugh and explain my feelings about most open houses. Of course, if the house is located in an area that I want my name to get out in, I'll give them the option of letting me have at least one.
And the majority of my sellers don't want one at all. They realize that we can't qualify strangers that come through the door. It's different when they have scheduled showings with other agents, as hopefully those agents have pre-qualified the buyers and know a little about them.
I hope this has dispelled some myths and ideas about why agents hold open houses. This way you can determine whether going through the trouble of leaving your house (along with your pets and children if you have them) for several hours on a weekend is worth it to you for the reality of a low chance of getting a sale out of it.
Posted by Judy Orr on
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