Is an Open House Necessary When Selling A Home?

Posted on Jan 19 2015 - 11:07am by Bill Gassett
#36

Open-Houses-UsefulWhen you go searching for a real estate agent, you are likely to hear a number of sales pitches speaking of the necessity and desirability of an open house. Many agents will speak of their enthusiasm for open houses and how they will do well for you with all the traffic they draw. What you may not realize, though, is that a real estate open house typically has far more benefits for your agent than for you. The question of course that is on the minds of many homeowners is does an open house sell homes? One thing is certain - statistics don't lie!

What may be a real shocker is the fact that less than two percent of all homes sold nationally are a direct result of a buyer visiting an open house unaccompanied by an agent. Real buyers are with real estate agents who schedule appointments. The people who come through your home on any given Sunday open house are not likely going to be the ones opening up their checkbook and handing over an escrow deposit!

So when people ask is an open house necessary when selling a home, the answer is clear, cut and dry - NO!

Problems with Open Houses

  • Wrong Kind of Traffic – One of the biggest issues with open houses is that real buyers rarely attend them. You may get a number of different people walking through and viewing your home, but legitimate buyers are usually rare. Your neighbors might come by to satisfy their curiosity and you may get people taking a walk-through to get ideas for their own renovations. You may even get a few people who dream of one day owning a home just like yours – only they do not currently have money to purchase something as expensive as yours.
  • The Unqualified Buyer - The likelihood you will get some buyers who are actually thinking about purchasing a home are pretty good. The problem however, is the vast majority of these people will not be qualified to pay your asking price. What is ironic is that most real estate agents will drive home the point about how important it is to qualify a buyer looking to purchase your home. This gets thrown out the window like the baby with the bath water when it comes to an open house.
  • Busy Work – Your REALTOR® wants to appear valuable to you and an open house is a great way to accomplish this. It is one of the few tasks a REALTOR® can engage in that is easily viewed by clients. You see all the work the REALTOR® puts into the open house and it makes you feel like you are getting your money’s worth.  In reality though, most of the work that goes into selling a home happens behind the scenes. Connecting with other REALTORS®, listing a property across a number of different marketing channels, and using social media all happen out of sight. Hence, clients don't always see everything they do.
  • Mainly for Your REALTOR® – All sorts of people will wander into your home, even if few of them are truly interested or capable of buying. This is not advantageous for you, but your REALTOR® knows how to utilize this traffic. It allows an agent to make connections or network – one of the most important components of growing a real estate business. The agent will meet your neighbors who may need to sell a home in the future. He or she will also meet those that don't qualify for a home as expensive as yours but who may be in the market for another home the agent happens to be selling. That home of course would be in their budget and not at the price point your home falls into. Your agent will also add another successful showing to his or her belt, and therefore be able to tell you, “I have shown your home X amount of times and drawn X amount of traffic.” Very few real estate agents are going to tell you that the real reason they are holding an open house is to get additional clients.
  • Security Issues - What many real estate agents fail to do is inform their clients about the drawbacks of an open house. Rarely are both the pro's and con's of an open house discussed. It is usually just the potential benefits. Unfortunately an open house is the perfect invitation to invite unqualified strangers into your home. When you do this you are potentially opening yourself up to a whole set of issues you probably have not given much thought to. Numerous sellers have reported theft both during the open house as well as on a later date when thieves who have visited come back and take what they like. It's no surprise this happens as an open house invites anyone and everyone into the home. If the open house is busy, it is impossible for a real estate agent to watch everyone.

See Past the Curtain     

You certainly need a good Wizard-of-Oz-2agent to sell your home. A skilled REALTOR® can help you get a better price and move your home much more effectively than you can selling as a for sale by owner. However, do not be fooled by the illusion that an open house presents. Yes, some homes are sold through open houses, but the statistics are not encouraging. Far more homes are sold through hard work and the skill and talent of good REALTOR®.

If you still want to have an open house, by all means have one. But do not be fooled by claims from various real estate agents that having an open house is a “must” or that this or that agent is great because of them. Some agents are better at selling homes than others, but no one that is good will pretend that an open house should be a main priority. Very few top producing real estate agents hang out in someone’s home waiting for a buyer to show up.

The bottom line despite what some agents may tell you is this - a buyer who really wants to see your home will always schedule an appointment to see it. If you were in the market to purchase a home and saw something you really wanted to look at, would you be saying to yourself "If they don't have an open house I'm not interested,"? Of course not! Sounds pretty absurd when you think about it.

Like the popular old movie "The Wizard of Oz," make sure you know who is behind the curtain when selecting a REALTOR® to work with. The easiest way to do this is by asking good REALTOR® interview questions. When you do so, you will be more apt to find a true real estate wizard and not someone who will disappoint you.

Bill Best photo 002-1 cropped (1)Bill Gassett is a nationally recognized real estate leader who has been helping people move in and out of the Metrowest Massachusetts area for the past 27-plus years. He has been one of the top RE/MAX REALTORS® in New England for the past decade. In 2013, he was the #1 RE/MAX agent in Massachusetts. Connect with him on Google+.

36 Comments so far. Feel free to join this conversation.

  1. Marilyn Messenger January 19, 2015 at 3:30 pm - Reply

    Totally agree! ! No reason sellers should be allowing strangers in off the street just because it’s Sunday and there is an agent there. Free entertainment on Sunday afternoon! An agent should be using a property for their own business development!

    It is a terrible way for a buyer to see a house! Qualified buyers have an agent or will get one if they are really ready to buy; they do not wait for open houses! They want to take their time to really look and be able to talk – they can’t do that when there are other people around. We really need to stop this practice!

    • Marie Beninati January 21, 2015 at 9:36 am - Reply

      Totally disagree. It depends on the market. I would challenge the statistic. Would the author please reference the study referred to.
      There are buyers who only go to open houses – that is still a considerable part of the market and you lose them.
      I feel that most agents don’t want to invest the time necessary.
      We get good results and have a chance to sell the house ourselves to people who come in. Word of mouth is also a very important aspect.
      There are lots of things that are effective in one market and not another.

  2. Cheryl Dwyer January 20, 2015 at 8:45 am - Reply

    Thank you! Although I have sold a house to a qualified buyers at an open house, I know it was truly an exception. While holding an open house I can’t fully concentrate on the features of the house with a set of buyers because I’m too distracted trying to get people signed in, watching someone’s kids open drawers, jump on furniture or wonder what is taking that person so long in the bathroom! Which no one touring an open house should be using the bathroom but am amazed at how many just think of it as a public restroom!

    You’re are right it’s prospecting for us although experience has taught me those are tough to leads to convert.

    I’ve had my time wasted to find out when I send them to get preapproved that they don’t qualify for any type of purchase.

  3. Bryan Hoffman January 20, 2015 at 6:50 pm - Reply

    I respectively disagree. The 2% statistic is a misleading reason as to why to not hold an open house. I’ve had a large number of buyers come through an O/H, even though they were represented by an agent. Their agent couldn’t visit for whatever reason but your 2% stat is referencing the buyer not having an agent at all. This stat is more important in tracking when the listing agent also represents the buyer than for any other purpose. Neighbors have friends and/or family looking to move into the area. An O/H is the best time for that neighbor and/or friend to visit. I’ve also noticed a trend that buyers want to work directly with the listing agent. For efficiency sake, an O/H is the best way to show the home. Lastly, an O/H all but guarantees the home is at it’s very best showing condition (all lights on, proper scents for the home, blinds/drapes open, the home is clean throughout, etc. A 2 hour notice during the work day doesn’t very well guarantee the home will be presentable, especially if the buyers agent just shows up and open the door when the clients arrive (not prep the home prior to the clients arrival). The benefit of this kind of article is less industrious agents will believe this kind of advice and continue to fall by the way side, while the remainder continue to gain the greater portion of business to be had.

  4. Roger Richmond January 20, 2015 at 8:29 pm - Reply

    This is the best way to meet the neighbors you never knew!!! When people have nothing to do they go to an open house to pass time and check out decorating ideas. When asked about Open Houses in my listing presentations, I have the same answer as the one “will you reduce your commission” One word NO.

  5. Bob McTague January 21, 2015 at 7:10 am - Reply

    Excellent article! I agree that open house are geared more for agents looking for future buyer business. As long as there is full disclosure to your seller clients as to WHY you would hold an open house, then it seems alright to keep them as a prospecting tool. However, there are better ways to find real qualified buyers.

  6. Alex Rubin January 21, 2015 at 7:53 am - Reply

    The only thing open houses are good for is the agent holding the open house. It is a great way to fill my pipeline of clients for the coming 6-12 months.

  7. Jim Wagner January 21, 2015 at 8:08 am - Reply

    This article is spot on. I am going to print it and share with sellers. Thanks

  8. John Nadler January 21, 2015 at 8:28 am - Reply

    The entire topic of Open Houses and their effectiveness really depends on your perspective. You can’t argue statistics about homes sold as a result of the open house but I can tell you from a business management point of view, we heavily promote open houses for the “Exposure” (consumer) and for the agents as well as the company. It is a proven fact that Open Houses do generate buyer and seller traffic and that a well trained agent has a shot at selling that house or picking up some great prospects. Here’s a statistic that also doesn’t lie – when we recently did a 5 week, well promoted open house campaign, we outperformed the market significantly. Bill Gassett, I just think you don’t like to work on Sundays.

  9. Mike Kozlow January 21, 2015 at 8:41 am - Reply

    I am curious as to what your position is on “broker opens”? Are they just an invitation for free food, or do they really get the home in front of potential partners in the transaction.

    All usually have seen the virtual tours and pictures.

  10. Jerry McEwen January 21, 2015 at 9:26 am - Reply

    A well presented argument against open houses, however, trying to put a one size shoe on every situation never works well. In our area, there is a surfeit of young lawyers, who believe the other pundits who tell them they can get a better price if they don’t have a realtor, and, that all the information they need is on Zillow or Redfin. These watch for open houses in the neighborhoods they want, and come prepared to negotiate for themselves and let the listing agents write the contracts. We routinely sell 2 to 3 houses a year in this fashion, which helps both the seller (we give them a break on the commission) and the Team cause we keep both ends. You need to know your market before applying everything you read.

  11. Rossi Speaks January 21, 2015 at 9:32 am - Reply

    Excellent article Bill, thanks for telling the truth. Only one thing you left out is the Consumer’s Perception that open houses are a necessity.

    I, too, believe this perception is incorrect and you are correct in that they are more for the agent than the seller. Let’s play on this perception.

    Hold an open house to get more listings. If I owned a property and was considering selling, I would look at the agent holding the open as an agent doing more than one that doesn’t hold open houses.

    Here in Raleigh, NC, we have a Highly Productive agent who has sat open house EVERY weekend for over 20 years and claims it is her key to success at being a top lister.

    Keep up the good writing Bill and Keep Smiling, Rossi

  12. Carla Heitz January 21, 2015 at 10:29 am - Reply

    This is exactly what I tell my potential seller clients when I first sit down with them and go over my market plan.
    I have been selling homes for 25 years, and only sold 1 home 20 years ago.
    It is much to dangerous for Realtor’s to be sitting in a home with the door open and a sign which tells anyone, Come Right In.
    I ask the sellers if they would leave their door open with a sign that reads come into my home, most say “No”. I would rather be upfront and explain the negatives (as you mentioned in your article) so that we are clear from the start.
    Great Article. I will definitely use this on listing presentations.

  13. Alice Chan January 21, 2015 at 11:01 am - Reply

    I’ve sat for hours with no one coming to the open house and others that are exactly as you describe. Unqualified buyers and neighbors. I do see more people that have already viewed the listing online and others that are not wanting to bother their agent to show them since we are open. I am always happy to cover a courtesy showing for another agent if they are not available to bring their buyers to the home. Personally I would rather not hold open houses, not that I don’t want to give my client all the service they deserve but feel an exceptional marketing program and attentive agent will get better results with less stress for my sellers. Thanks for a great article. I too would like to hear thoughts on Brokers opens.

  14. Ginny Hazen Damman January 21, 2015 at 11:19 am - Reply

    iF YOU HAVE A SIGN IN SHEET AND ASK IF WORKING W/AGENT,THEIR EMAIL, PH. # . HAVE A SIGN STATING THIS IS FOR THE PROTECTION OF THE HOME OWNER AND WE DO THE SAME FOR YOU.IT COULD HELP BUT ALSO ESCORT THEM AROUND EITHER IN GROUPS OR WAIT UNTIL THEIR TURN??
    I GUESS NO REALLY GOOD SOLUNTION??

  15. Audrey Peters January 21, 2015 at 12:06 pm - Reply

    I disagree. I sold a $1.24M home with a buyer I met at the open house I was hosting for my Broker. I then sold their home too as part of the same transaction. It is all about the realtor and what they do at the open house to engage with the buyer and not SELL. Although the internet is where buyers look and research, I don’t believe they pick their agent that way. It’s still about the personal connection and an open house facilitates that.

  16. Bill Hanner January 21, 2015 at 1:05 pm - Reply

    I also disagree with your article. IF you examine the NAR report on buyers and sellers, you will see that Open Houses is one of the top activities that Buyers DO attend. They find it important. I have sold many homes due to my Open Houses. A more balanced article is what I expect from RIS Media. You may not like them but you brand us all who do find value in them as not telling our sellers the truth. Open Houses do work in Michigan. I wouldn’t do it if it was a waste of my time or my seller’s time.

    • Nick Caruso January 22, 2015 at 11:03 am - Reply

      Hi Bill – thanks for reading and commenting! Certainly, open houses have varying degrees of success depending on the market. What works in some markets may not work in others! I think the comments section here alone proves that many people do find open houses to be useful, and that it is a polarizing topic. We’ve definitely covered open houses many times on our main website. Click here to read about the other side of the coin: http://rismedia.com/?s=open+house&sentence=1&post_type=post&post_status=publish Thanks for the discourse and for reading!

  17. Bridget January 21, 2015 at 1:12 pm - Reply

    I totally disagree! While I do believe that there is a benefit to the agent, I believe that there is a benefit to open houses. I have sold a listing at an open house and believe that the more traffic that comes through that open house the better! I personally don’t mind the neighbors coming through as they may know someone that may love the listing! Since they are nosy, they will probably tell everyone they know about the open house they went to! Sounds like pretty good advertising to me. Don’t be lazy. Have an open house!

  18. Zohra Abuzalaf January 21, 2015 at 5:29 pm - Reply

    For me open house is very important in the fact that, I get to hear the public comments about the house. What they like and dislike about it. What they think about the price, the neighborhood. Sometime they start comparing it with the other houses they’ve visited. I think people’s feed back is very important to convey to the seller. It also depend on the neighborhoods. We cannot generalize. Open house does sell in (Oahu, HI).

  19. Bill Gassett January 22, 2015 at 3:12 pm - Reply

    Guys please read the title – Is an open house necessary to sell a home? Can anyone say that the answer to this is yes? I sure hope not! If you believe that then you shouldn’t be in real estate.

    When you break an open house down to it’s simplest terms it is a couple hour block of time people are allowed to see a home. There are 24 hours in a day and 7 days a week.

    That leaves 165 hours other than the time at the open house to sell the home.

    If you are a skilled agent and price the home correctly there should NEVER EVER be a need for an open house other than to put additional clients into your pocket.

    Open houses will always be an opportunity for an agent to prospect and that is perfectly fine BUT please be honest with your clients about it. Stop with the charade that they are necessary for anyone other than YOU!

    John Nadler – you are 100 percent correct I don’t want to work on Sundays. Guess what – I don’t have to! There isn’t a REAL buyer in the world who will pass on a home they want to see.

    I also don’t need to spend a Sunday in someone’s home looking for prospects – thank god!

    BTW – did any of you know that Maryland has banned an agent from talking about any other property other than the one being held open during an open house?

    I would be willing to be if every other state took this course of action there would be far fewer open houses!

  20. Adrienne January 22, 2015 at 3:57 pm - Reply

    Bill – you are 100 percent spot on! An open house in not necessary to sell a home! It amazes me when agents try to argue the point.The only reason they do is because of the prospecting aspect. that you mention.

    I would love to be a fly on the wall and hear just how many point out the security issues. I bet the percentage is very low.

    Very interesting what Maryland has done!

  21. bayareapropertybuyer April 28, 2015 at 3:43 am - Reply

    Thanks for the detailed post

  22. steve May 4, 2015 at 11:42 am - Reply

    Security wise, any homeowner thinking about “should or shouldn’t I have an open house” has to ask themselves a question. If I wasn’t selling my house at all, would I put a sign up saying ‘open house’ which allows anyone at all to enter? Turn the security system off, unlock the doors, let anyone in who happens to pass the sign and who feels like stopping along their real destination point. Hmmm. I don’t think so. I have had success doing an open house with no signs, only advertise on line and those who are really looking to buy are the ones who show up. Not just anyone off the street passing by. Its somewhat a filter. Maybe the only way to do an OH.

  23. @RENewsletter May 4, 2015 at 6:00 pm - Reply

    Interesting discussion!

    As a Marketing Assistant working with many real estate agents, I would agree that Open Houses are loosing their appeal for sellers, buyers, and agents. Though it still may be a good opportunity to introduce yourself to the neighbors & pick a possible lead for a listing in the neighborhood.

  24. John July 29, 2015 at 12:41 pm - Reply

    I think that if you have not been using your house for too long, or if you are getting back on payments, or something similiar then the best course of action is to sell it. Since you don’t need it anyway you won’t suffer a great loss, but on the other hand you will have a new source of tempoarry income. If you are interested in this idea, just check out http://www.propertyforsalefast.com or a similar site to see all of the possibilities

  25. Mary October 27, 2015 at 6:23 pm - Reply

    Excellent, very well done. I am a Broker/Realtor for over thirty years. Appreciate your truthfulness in regards to the reasons
    this practice has seen its day.
    Sold hundreds of house over the years and only two by open
    houses. Remember those very well. It was summer and both were very close to a body of water. They were also priced perfect.
    Overpriced houses do not sell even with an open house every week. Seasoned Realtors remember past mistakes the best. Lost time because of demanding sellers with over priced houses are very bitter memories. Rarely did I ever close with them. After many months of drawn out open houses they relisted, lowered the price with the new agency.
    Open houses are just not safe and I have known of many thefts in our areas. It is like hanging a key to the house on a ramp sign off the interstate.

  26. Marvin Von Renchler January 19, 2016 at 12:31 pm - Reply

    36 years in business. Responding to everyone above—sure there are exceptions to every rule and some of you may have made a lot of money from opens but Ive seen thousands of transactions by hundreds of agents over my 36 years and very few came from opens. Ive only sold two since 1980 to buyers who just came to an open. Opens are, as the author said, FOR THE AGENTS. That wasnt yelling, lol. You can mine opens for leads. I developed many ways of holding onto people who walk in then leave but real estate has changed. Newbies dont realize how much. Even though I can pull leads from opens, I dont do them any more. Countless wasted hours over 36 years could have been used for so many more productive methods to make commissions.

    The fact that they can be dangerous for agents should be considered. Also, as other said, strangers can case the joint.

  27. Aurelia Peart February 11, 2016 at 2:34 am - Reply

    That’s useful information but i think you should try to sell house by your own. If things didn’t work out then you should think about home staging. Thanks!!

  28. Kel February 20, 2016 at 1:09 pm - Reply

    Bought my house after stopping at an Open house. Maybe it is mostly for the agent but that doesn’t meet it doesn’t work. Also I stopped by an open house, got a card and gave it to a friend looking to sell. The seller of that open house bought the house of my friend. Weird world.

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