Our Love/Hate Relationship with Open Houses

There are a variety of ways to market a home that is for sale. One that immediately comes to mind is having your agent host an open house. In our market that mostly happens for a few hours on a Saturday or Sunday afternoon. Another variation is called a “broker’s open house”, which usually happens during the work week and gives agents a chance to preview new listings during times when they are not likely to be working with buyers. Many sellers will want open houses, but are they really effective to attract buyers? The short answer is that open houses are only modestly effective. Let’s take a look at the pros & cons of hosting open houses.

open houseTop reasons that we love Open Houses

  1. Helps introduce a new listing – We like to host a broker’s open house plus a regular open house when we get a new listing. This is a way to introduce a property to the local agent community and is a way to introduce the home to the neighborhood. Word of mouth from neighbors and agents can be a powerful marketing tool.
  2. Lets the DIY buyers see the house without an appointment – There are buyers who aren’t regularly working with a real estate agent, so hosting an open house is a method for them to see the home without having to make an appointment. In our market, we frequently see buyers from the discount-broker Redfin who are directed to an open house so that they don’t have to send out one of their field agents for a home tour.
  3. Connect with buyers looking for a real estate agent – It is very infrequent that a person who attends an open house ends up making an offer on that particular house. Many agents are willing to host an open house to try and gain new customers who are in the market to buy a home and may not have an agent. Yes, this is self-serving on the part of the agent, so as a seller you should recognize these motivations.

Top reasons that we hate Open Houses

  1. Low success rate – The percentage of homes that are actually sold via open house is very, very small. Most homes are sold via private showings from a real estate agent. Before insisting on more open houses, talk with your real estate agent about the success rates they have seen when hosting open houses.
  2. Difficult to advertise – In our market, brokers are very territorial about their open house listings and many are NOT posted to the local MLS. This means that there isn’t a single place to find out that an open house is scheduled. For example, if Broker A is hosting an open house, you can only find out about it on Broker A’s website, not on Broker B’s website. The misguided idea here is that if Broker A is spending marketing funds to promote their listings, why should they potentially direct buyers to open houses held by a competing broker.
  3. Attendance is not reliable – We’ve advertised a bunch of different ways, and there is no reliable method to attract buyers to an open house. Despite identical advertising, one weekend you’ll see eight buyers and the next you’ll see zero.
  4. Success depends on location – One of the best ways to have a successful open house is to be located in an urban neighborhood with good car and foot traffic. Homes in a rural or suburban area have very little off-the-street traffic and generally have much lower turnouts. Also, large condo complexes are very difficult. It is hard coordinating access through the lobby, and even more difficult to post signage for the open house in these large condos.

The bottom line is that open houses are only modestly effective to help sell a home. Our approach is to host an initial open house to introduce a home to the market and then assess future open houses based on ongoing traffic to the property. As a seller, you should recognize that there are other marketing methods that yield better results such as online advertising, staging and price incentives. If you are looking to list a home for sale, have a conversation with your listing agent about their complete marketing plan.