Debating the Effectiveness of the Open House
May 17, 2006
A recent article in the Washington Post explores the merits of public open houses hosted by real estate agents. On average, public opens generate less than 2% in sales. In other words, less than 2% of the time a public open house sells the home to an open house visitor. So, why do we do it? A couple of reasons; (1) It's part of the standard marketing program listing agents use to win listings, and (2) it is a way for listing agents to get leads to potential buyers, aka: new clients.On the other hand, broker open houses can be very effective. A brokers open is essentially an invitation for real estate agents to view/review a relatively new listing. The objective is also two fold; (1) present the property to as many agents as possible that may have buyers, and (2) solicit feedback from other agents on how the property shows, recommendations on what might be spruced up and opinions on how it is priced compared to what else might be on the market that is comparable. To those of us attending broker opens, previewing homes provides us more information on what is going on in the local market for a potential buying or listing client. It broadens our market perspective.
Another opinion on open houses is given by Ardell DellaLoggia who writes for the Rain City Guide (RCG). She appears to have found some "magic" in making public open houses successful. Her article can be found in the RCG Archive.
The conclusion: It all depends.
Public Opens:
In a sellers market, in a popular neighborhood, in the right price range, a public open house will attract a high number of potential buyers (along with their agents) and may produce a contract (or several). In a buyers market, my experience is that the "nosy neighbors" come to satisfy some curiosity but no real interested, qualified buyers. A case in point: at a recent open house Pam hosted of a $1.2M listing a family visited, spent considerable time touring the home, asked many questions and in the end, Pam got a "not in my price range" parting comment. Go figure. We are in an extreme buyers market in our area and public opens attract few, if any, visitors.
Broker Opens:
The same analysis holds true with one exception. Food. I reviewed several broker opens this past Tuesday between 11:00 am and 2:00 pm and found that the most popular (had upwards of 30+ agents attend) was one that had a gourmet caterer serving sliced fillet Mignon, shrimp and lobster on skewers, a myriad of salads and exotic deserts. Agents are attracted to food. The runner up was an agent giving away a $50 restaurant gift certificate (more food) in a drawing held after every fifth visitor. I am pleased to say I won one of these! Both properties were spectacular in their own right and will make wonderful homes for a potential buyer. Pam and I have had broker opens recently that attracted as few as two to three agents. We always have a light lunch available, maybe not spectacular. Will upgrading our lunch offering bring more agents? Maybe. Will it give us quality feedback? I'm wondering.
I am sure of one thing. The debate will continue.
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made the following comment on May 22, 2006 5:27 PM
Ardell, great feedback. I read your post on opens with great interest as most agents in our area agree that opens don't get contracts. They may get buying clients on other properties, but no contracts. I'd like to here more of your experiences on this subject.
Hi Merv,
There is always a debate of pro vs. con, when you generalize. But let's get to specifics.
A house that is more likely to sell from an Open House is:
1) Low price range - more buyers without agent wandering about in this price range.
2) Busy Road - more agents chose not to show it, so buyers more likely to find it on their own via an Open House
3) Just over the line - due to technological advances, many people search via town. If your listing is just across the street "in the next town" from the one most searched, it is more likely to sell from an Open House, as people miss it in web searches. Some with right town, wrong PO aka zip code.
If you have had 100 agents show the property and no offers, an Open House won't "save you". Time to get real.
A good listing agent can walk into a property and know if it will sell from an Open House, or if it will be an "agent controlled" sale, within 10 minutes.
Some agents waste a lot of time holding the wrong houses Open and then say Open Houses don't work.
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