The Open House
In some circles, this is like touching the third rail of politics. Open houses are those wonderful events where a listing agent ejects their seller for a period of time, typically a nice, sunny weekend afternoon, and allows the general populace to come traipsing through their home. Putting aside any concerns of agent safety, theft from open houses, or being ejected from their home, should sellers accede to their agent’s push to do an open house? How about agents? Should we do an open house because the seller demands one or should we educate our sellers on the efficacy of the open house?
There are sellers that will swear by open houses, for a variety of reasons:
- It’s how we bought our house.
- Everyone does it.
- My friends told me we should do one.
- My agent arm-wrestled me in to doing one.
Conversely, some agents will demand they do an open house because it’s in their “marketing” program. In my opinion, this is kind of like claiming that when we have a cold, that the chicken soup is the cure. The soup certainly makes us feel good, but it does nothing to move the healing process along more quickly.
I think a quick look at some pesky facts will show the same about the efficacy of open houses.
So, we have a mixed bag here on the location of where the buyer found their home; the 9% figure used here represents both yard signs and open houses. So, the quick take away here is that, at best, 8% of buyers found their home via the open house, or at worst, 1% did.
Either way you slice it, that is worse than a 1 in 10 chance that a buyer will purchase the home being held open. I can already hear the arguments cropping up about how not doing an open house cuts the 9% out of potentially purchasing a home held open.
For those arguments, I say:
The reality of how seldom homes sell as a result of the open house, does not appear to impact the agent’s reliance upon them in their overall “marketing” mix. I put marketing in quotes there for a reason. Can you guess why? The answer will be revealed after the graphic.
Nearly half of all agents that list homes uses the open house in their marketing mix. Five-Oh. Fiddy percent.
So, to recap, and drop some knowledge, a “marketing” process that has a less than 10% chance of success, is used nearly 50% of the time. The reason why an agent would continue to push to do an open house has more to do with their business, than selling the home being held open. Can it really be called a marketing technique for the seller’s benefit, when clearly the open house is being used more as a branding proposition for the listing agent?
Now, some of my past selling clients, bright and intelligent folks all, will be laughing at this point. They’re laughing because they’ve heard me rail on the open house for nearly 13 years. When I first got started in real estate, I was directed to do open houses as a way to build my business and learn the market. Well, learning the market is well and good and does, eventually, benefit consumers. The hiccup for me was the “build my business” bit. My fiduciary responsibility is to the seller. Why am I pimping their home for more business with a technique that has a less than 10% chance of selling their home?
Then a funny thing happened when the market became a strong seller’s market…
A past client engaged my services to sell their home. They had a newborn, and two toddlers, so they were beginning to bust out of the seams of their 1050 square foot ranch. We settled on a list price, and a date to shoot the photos and video of their home. We even chose a list date for their home to become live in the MLS.
And then the Mrs. asks a question that has transformed how I list homes.
Todd, our child has a learning disability that makes it difficult to get back to a normal routine, when the daily routine is interrupted. If you think that there will be a fair amount of traffic for this home, is there some way we can cut down on the inconvenience to my family?
A light bulb went off in my mind and here is exactly what we did:
We captured all the media (photos and video) for their home, created a single property website to answer as many of the potential buyer’s questions as possible, and launched the listing active on a Wednesday. We did not allow any showings on the property until the Open House that was held the following Sunday, from 2 – 4pm. Not.One.Showing. None.
At this open house, we had 140 attendees. Before I left the open house, I had 4 offers in hand, and an additional 5 threats of offers to materialize. By Monday evening, my sellers had 17 offers to review and finally settled on an offer that sold the home for 12% more than the list price.
Moral of the Story – If you are going to allow your home to be held open, make sure that it’s a part of the marketing strategy for your home and that there is a clear plan of attack on how to maximize the impact of your open house to cause your home to be sold.