Open Houses are a staple in the real estate industry. When the market is hot, you’re likely to see dozens of open house signs from every real estate brokerage in town at every major intersection on the way to the grocery store. But what if I told you Open Houses don’t sell houses. Let me rephrase that. Open Houses don’t sell the house that is open.
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Sure, there are exceptions. I’ve sold property as a result of an open house but consider the facts. According to the NATIONAL ASSOCIATION OF REALTORS profile of home buyers and sellers 45% of buyers cite open houses as a means to searching for a property and 11% of buyers bought their home as a result of sign yards and/or Open Houses. The key piece to note is the survey groups both For Sale Signs and Open Houses together which will skew the results. Many potential buyers will drive up and down their favorite neighborhoods in search of their future home and typically call on the yard signs or jot them down for their realtor to follow up on. The reality is historically Open Houses account for less than 1% of home sales. Again, I’m talking about the house that is held open.
So why are there so many Open Houses if they don’t work? The truth is, Open Houses do work. I know I just finished telling you they don’t sell the home but they do sell homes. Open Houses work to the real estate agent’s benefit.
The main reason real estate agents will hold an open house is to find new clients. Neighbors thinking of selling, buyers who aren’t working with an agent make for great new clients. If they are interested in the property being held open, great! But what are the odds? The likely scenario is a potential buyer stops in to see what the property has to offer but finds the house is too small, too big, too old, too expensive, not enough storage, you get the idea.
The agent will do everything possible to build rapport, gain their visitor’s search criteria and contact information with the hopes of becoming their real estate agent and selling them a different property.
It is common to find newer agents holding Open Houses for other agents to develop their database of buyers and sellers as a strategy to increase their business.
The Bottom Line
Open Houses like anything else is a great way to expose your property to the market and should not be discounted. As stated earlier, I’ve personally sold homes I held open, just know, relying on Open Houses to sell your home may just lead to disappointment.
About Daniel Di Matteo
THE REAL ESTATE BUSINESS HAS LESS TO DO ABOUT SELLING PROPERTIES AND EVERYTHING TO DO ABOUT HELPING PEOPLE.
