Should I Hold An Open House???

The NAR (National Association of Realtors) has conducted studies that show the chances of a home selling due to holding an open house are very small. The truth is open houses were much more important before the day of digital photos and virtual tours. These days, without ever physically goning through a home, most homebuyers already know what the interior and exterior look like by viewing the online media. If they like the look of a home, buyers can simply set up a private showing with their Realtor at a time that is convenient for them.

Let's consider that a good turnout at an open house event will bring 5-10 sets of people through (half or more of which are usually just nosey neighbors). Now compare that with the traffic of just one website. In an average week on the GRAR MLS public website, I will often have hundreds of online lookers that will view the “detailed page” of one of my listings (I e-mail the stats to my clients every week). That's why I take so much care in the way I list homes and the way I present the digital media. An agent that knows how to properly market your home online is worth a lot more than one that’s willing to hold an open house every week or two.

So why do agents still hold open houses? I’ll give you what I believe to be the three primary reasons as a percentage of motivation to the average agent.

60% - In order to gain new leads/prospects.
35% - In order to appease the seller.
5% - In order to market/sell the home.

Your agent probably won’t admit it, but the main reason he/she will hold an open house is in hopes of gaining a few good client prospects. Often times, new buyers that are just starting to look will start by browsing through a few open houses on Sunday afternoons. If the new buyer isn’t already committed to an Realtor, you can bet the open house agent will attempt to pursue them as a client. That’s why you’re always signing those annoying open house registries that ask for your name and number when you walk in.

The other primary purpose agents hold open houses is because they want to show the seller that they are actively doing something to sell the home (regardless if the activity is productive). Seller’s are often misinformed and think that open houses are a pivotal part of the marketing process. After all, why is the Sunday paper so full of them? What you'll actually find if you research the subject is that more and more agents and real estate companies are electing not to hold any open houses as the cost and time far exceeds the benefit.

Yes, it true, on rare occasion a buyer may decide at an open house to purchase a home. However, chances are that a buyer that bought a home they saw due to an open house would have purchased the home regardless. Instead of deciding it was the perfect house for them at an open house, they probably would made that same decision at a private showing.

Here's something you probably haven't thought about... Did you realize that you are putting your personal property at risk when you hold an open house? Stolen items at open houses are not uncommon. Some thief’s specialize just in stealing at open houses. Think about it. What happens when your agent has two or three sets of people walk into your home at the same time? Your agent can’t keep an eye on them all. How easy is it for one person to distract the Realtor while the other goes and snoops through your closets, dressers, desks, jewelry box, etc? If you are planning on having an open house, be sure to put all your valuable positions in secured locations. Don’t forget to hide your prescriptions too, as they are one of the most common items for thieves to steal.

Having said this, there are still some rare occasions when I will recommend holding an open house. When would that be you may ask? Well, that’s for me to go over with my clients. One thing I can tell you is, a good portion of the top producing agents rarely hold open houses. They may have a newer agent, who’s looking for leads, hold one for them (that way they can still appease the seller), but typically you won’t find them sitting around keeping their fingers crossed for a buyer at an open house.

*** There are plenty of good agents that do hold open houses from time to time depending on the individual situation and circumstances (even myself). Some agents even believe open houses are a great marketing tool. Then again, some agents don’t even own a digital camera or cell phone.

-By Robert Young

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