One of the more interesting questions I get from prospective home sellers is , “Do Open Houses Really Sell Homes?” It’s an odd question filled with plenty of traps depending on how one might answer the question.
Yes, open houses really do sell homes. However, the open house is probably not the only reason the house will sell, and there are many different ways a home may sell. The most important thing you can do is work with a real estate agent who you trust and has a good track record.
I’m amazed at the varying responses to whether or not open houses really sell homes. Some real estate agents are completely against holding them. Others want to hold them every other day until the house is sold. I suspect that if you’ve worked with a Realtor in the past you’ve seen something along the lines of one of the two extremes. Let’s go over some of the high and low points of the debate and see where we end up at the end.
Open Houses During A Seller Friendly Market
To start off, there is an element of time associated with an open house. By this, I mean market timing. If the house is priced right, and the house is something that anyone might want, it may make sense not to hold an open house. However, some real estate agents will use a tight market to differentiate their home from others on the market. As an example, have you ever seen a “no show till open house” in the marketing remarks? This means that the house is listed, but no one can see it until the open house. Guess what happens when the open house comes? Potential buyers stream through the house, see all the people there, and then make an offer based on the traffic.
Open Houses During A Buyer Friendly Market
During a buyer friendly market, the open house might be the only tool you have to attract potential buyers to your house. Even with the open house, you’ll still have to deal with super picky buyers who just aren’t feeling your home versus the many other homes on the market. And, this leads to another issue we should talk about.
Seller Expectations For An Open House
Real estate agents work for the seller of the home. Every home seller has different expectations of how the home should be marketed, and how it will sell. They also have ideas on how their house should be staged or prepared for an open house. As an example, some sellers will have the carpets professionally cleaned before an open house, and other sellers will have pet stains on their carpet during the open house. This isn’t limited to lower valued properties.
There’s a real question here about what you are doing as a real estate agent to sell someone’s home. Let’s say that you are in a seller’s market and the house has sat for 60 days when the average days on market is 15. By now, your seller is going to start suspecting that you aren’t very good at selling homes. Remember when you told them open houses are stupid and don’t sell houses? Yeah, it’s going to be tough to explain what you are doing to market the home when you can’t be bothered to hold an open house.
The Real Estate Agent Matters, Here’s How.
Let’s say you have this real estate agent who sells a hundred homes a year. For the purpose of this example, let’s say they are dead set against holding an open house. Why do you think that might be? Well, it’s going to be really hard to hold open houses when they are trying to show homes to buyers at the same time. What are they going to do then? They’re either going to hold an open house and not be there and let their assistant do it, or, they are going to tell their seller that an open house doesn’t really sell homes and that it’s not necessary.
Let’s take that same agent who is now pro open house. The real estate agent and the home seller both want to hold an open house. We’ll go over the benefits for the seller in a moment, but this is the part of the argument that goes a little something like this. “Real estate agents only have open houses so that they can find more clients.” Therefore, the open house is only for the real estate agent’s benefit and should be avoided. Having held many open houses myself, my problem is with the premise. Can a real estate agent benefit from an open house? Absolutely. Is this somehow working against the seller’s best interest? I don’t see that. If you are a high performing agent and your seller wants you to hold an open house, how are you working against the seller’s best interest?
Three Main Types Of Open Houses
There may be some confusion when one thinks of an open house. In the St. Louis real estate market, there are usually three different types of open houses. I’ll explain below.
Public Open House
The most common open house is what I would refer to as the public open house. This is where the public is invited to view the home. We’ll go over benefits later, but just keep in mind that this is what is thought of as the traditional open house.
Agent Only Open House
The second type of open house is an agent only open house. These are where agents who have prospective buyers will preview the house before they bring their buyers. The point of this open house is that, as the listing agent, you are getting exposure and feedback from the real estate professionals who are likely most interested in getting their buyers to the home. The benefit of this type of arrangement is that the seller doesn’t have to keep adjusting their schedule every time someone wants to see the house.
Office Only Open House
The third type of open house is an office only open house. These were much more popular before the internet. What usually happens is that a real estate office will tour the office listings and report to their pool of buyers what a great home you have. The second part of this office only open house is to benefit real estate agents who don’t have a good idea on pricing in particular parts of town. Now, the office open house does have a limitation, and that is of the office size. Some well known brokerages in St. Louis only have 5-10 active real estate agents in their office, the rest of the agents on the roster don’t produce much. To me, the office only open house is something that is done when you want to flatter the seller. Telling a home seller that their home is so nice that you want everyone from your office to see is certainly a way to do that.
Does the type of open house get discussed very open when someone asks, “do open houses really sell homes?” I’ve never seen it. Hopefully you are beginning to see where the question may just be too generic for an answer.
Open House Benefits
There are benefits to holding an open house. Here are a few:
- Great Exposure For The Property. Real estate agents against having open houses will tell you that the internet has revolutionized the real estate industry and that you can find a home from your couch. It’s not that easy. People are attracted to events. When you throw an open house, just the hype around it will cause people to attend. That’s what you are looking for as a real estate agent dedicated to the seller. You want maximum exposure to sell the house.
- Potential buyers can view the home at a more relaxed pace. Some buyers may not want to bring their agents along but they still want to see houses. An open house is perfect for this.
- The house may actually sell. I’ve seen statistics all over the internet about houses not selling at open houses. I’m not sure how reliable those statistics are. Here’s why. I’ve had many buyers come through an open house and then put in an offer on that house. Definitely more than 25% of my open houses have resulted in an offer to purchase by someone who came through on the open house.
Open House Objections
I can understand different reasons for not having open houses. Here are a few of them
- Open houses are a waste of time. The thinking goes that the real estate agent has better things to do on a weekend afternoon than babysit a house. Also, buyers can be inconvenienced by having to leave their house to have it shown by others.
- No one buys a house at an open house. I don’t understand this objection. As I’ve said, I’ve seen many homes that have been bought by buyers who have come through the open house before writing an offer to purchase. What are these “real estate experts” doing wrong?
- Open houses only benefit the agent. The thinking is that the real estate agent is only holding an open house to benefit themselves. They might find a buyer who isn’t represented and then the agent will get a commission representing that buyer. I can’t say I’ve ever represented a buyer that I met at an open house. I don’t know if it’s my wonderful personality or my humble nature, but I’m far more likely to get my seller’s house sold than I am to get an additional buyer.
- Nosy neighbors They will come to your open house. So what? You’re moving anyway. I actually like nosy neighbors.
- Your house may be seen by unqualified buyers. This is an odd concern as well. Owning your own home is an aspirational purchase. This idea that someone may walk through a house that they can’t currently afford today, but someday may, is not an emergency, and I see no downsides to it. Are you familiar with Missouri basketball coach Cuonzo Martin’s open house story of when he was a kid? We receive offers from buyers all the time who aren’t going to be able to actually close on a house, things happen.
Are Open Houses Safe?
My question is for whom are we talking? There is an argument that a thief is going to come and case your home at the open house before they rob it. Is this true? If it has happened once, it is, but, this is a pretty rare event. It isn’t like there is this gang of people that just rob open houses after attending them or something. Now, we do tell sellers that when you put your house up for sale, you need to get all of the things that are super valuable to you out of the house BEFORE you have home showings. But that’s not an open house only situation.
If you are talking about the real estate agent’s safety, it’s a valid concern. You never know who is coming to an open house, and there are sick people everywhere. Just this past month an agent in California was assaulted by a man she met at an open house.
If you are talking about the general public walking through an open house, I don’t think the danger is any higher than if you were to walk through a house during a private home showing. However, brokerages do carry insurance for slip and falls at open houses, just in case.
Who Usually Attends An Open House?
The open house is designed to bring people into the house so that just one of them might actually buy it. While I’ve mentioned some of the people who may walk through the open house, here is a more complete list
- Potential Home Buyers – So, you’re holding an open house and potential home buyers are walking through. Congratulations! That was the whole point of holding the open house in the first place. Your real estate agent did their job.
- Nosy Neighbors – Maybe your neighbor is going to sell their house next year. Sure would be nice to know what the inside of your home looks like and how it would compare. Or, maybe your neighbor doesn’t like you and wants to tell the real estate agent open house what a dope you are. Either way, having a nosy neighbor at an open house is to be expected.
- Random People – It’s weird, but there are people that just like to walk through other people’s houses. My parents have a friend that goes to open houses every weekend during the summer as a cheap form of entertainment. They’re never going to buy a house, and that’s ok. At our brokerage, Deerwood Realty, we had a run where we had a lot homes for sale in University City. There was one family with children that came to all of our open houses, and I saw them at other open houses with my buyers. We were on a first name basis! They were never going to buy anything.
- Real Estate Agents – Yes, real estate agents like to go to open houses. Here’s why: Rather than going through all the trouble of setting up an agent preview online and inconveniencing the sellers, it’s just a lot easier to go to the open house. Real estate agents need to know the current market, so even if they don’t currently have a listing in the area, it’s still important to get to see what is currently available and at what price point.
What Does One Do At An Open House?
You know that you’re going to an open house, but do you know what you are going to do? Let me help you with that. You are going to walk through the house. Sometimes there will be chips and drinks, and sometimes there won’t be. Sometimes you will have an aggressive agent asking all sorts of questions of you, and sometimes the agent will be talking to someone else. The main thing during an open house is that you get to actually look at it and see how it compared to the pictures online. Don’t be shocked if the pictures don’t line up with your experience.
When Are Open Houses Usually Held?
In St. Louis, it’s really popular to have a public open house on Sunday afternoons between 1 and 3 p.m. At Deerwood Realty, we tend to have our public open houses on Sunday afternoons between 2 and 4 p.m. because we don’t want buyers to have to miss out on our house when they have 5 others they have to be at between 1 and 3. Now, it’s perfectly normal to hold an open house on a Saturday at different times, but for the most part, you’re looking at a Sunday afternoon in St. Louis. This might not be the case in other markets.
Agent Only or Office only open houses usually occur on Tuesday mornings in St. Louis. It is more likely that you will have them during the week and what would be considered normal business hours. Sometimes, the first time anyone can see the home is at the agent open house, so if you have buyers looking in a particular area, you almost have to be at the agent only open house so you can report back to your buyers to set an appointment when the house is available to be shown.
Where Can You Find Out About Open Houses?
There are all sorts of places to find out about where and when an open house is going to happen. Some people just drive parts of town on Sunday afternoons where they are interested in buying. Some prospective buyers check the national portal sites like Zillow or Realtor.com. Potential buyers already working with an agent will likely get open house information through the real estate agent’s link to the mls(Multiple Listing Service) This information comes straight from the real estate board and should be considered the most accurate.
Why Would Someone Go To An Open House?
That’s a fair question. The vast majority of people who attend an open house are people who are interested in buying or selling their home. They are active participants in the real estate market. Do open houses really sell homes? Well, if you have a pool of active participants in the real estate market at your open house, I would say the chances are better than not that someone in that group is a real buyer.
What Is A Good Turnout For An Open House?
This would be a question that can only be answered with “it depends.” Let me explain. I’ve held open houses where there was a steady line of people coming through the house and they were waiting to get in before I even opened it. I didn’t get an offer to purchase from anyone. I also have held an open house where 1 or 2 couples came through. Funny side story, on one of the houses where only 2 couples came through, they both put in offers to purchase the property and were the only ones to do so! The couple that lost out on the purchase of our listed home ended up buying the one down the street!
How Many Open Houses Should A Realtor Have?
This is an important question. The first question should be whether or not you are going to hold an open house at all. There are times when I think it doesn’t make sense to hold an open house. The main reason I wouldn’t hold an open house is if the house doesn’t pass my “shower test” for listings. If the seller thinks it’s a good idea to have an open house, and as a real estate agent you think it is a good idea to have an open house, then I would say at least 1 open house. After the initial open house, the majority of your buyers will have seen the property and you will have a pretty good idea if you’ve come to market with the right price. After that, we usually wait about a month before holding another open house. The reason for this is that your house is still available for showings and there’s no reason why a motivated buyer wouldn’t just schedule an appointment then.
I’ve seen for sale by owner sellers have open houses every weekend. They have an obvious answer to the question, “do open houses really sell homes?” However, they are also at a bit of a disadvantage. It’s not often that they’ve installed a lockbox on the property for buyer’s agents to set appointments. They are probably going to have to rely on calls for appointments and then physically going to the house whenever one wants to see the house. That makes holding open houses easier on this type of seller.
Do Open Houses Really Sell Homes?
As a real estate broker in South St. Louis, my goal is to get your house sold. That’s my number one priority. I see no downsides to holding an open houses except for very rare circumstances, and I only see multiple benefits. If you’ve been told by your real estate agent that open houses are dumb, are a waste of time, don’t really sell houses, you might want to question who you are working with. The most successful real estate agent team that I know in St. Louis uses open houses, maybe the agent who is anti-open house with 2 sales over the year might want to try it. Just a thought. What do you think? Write your comments below. I’m interested to know your opinions.