Whether or not open houses work depends on who you ask. If you ask me, I have my standard answer which is: It depends. They can work; however, as you’ll see when you read further, most buyers are using them as a research tool, not necessarily to buy the house(s) they’re going to look at.
They’re looking at the houses mainly for learning the market – to know what they get for their money, comparing the houses to what they’ve seen online. They – and neighbors – are looking for remodeling ideas – they can do that on Pinterest.
Thieves are looking at the houses to see what they can steal. And be aware and beware, they are certainly out there. Their tactic has been to come in pairs or groups. One person distracts the agent while another one or two ransack closets, drawers and medicine cabinets.
I always warn sellers about the dangers of open houses. Now, I warn myself and refuse to do them unless another agent or mortgage person is available to be present – which is not the best use of their time so it’s not always possible. It’s not overdramatic when I say that realtors have been killed at open houses.
So if you want someone to stand there on Saturday and Sunday for several hours with your front door wide open while total strangers walk through it, I’m not your agent.
We have no idea who those people are or what their intentions are. If you want real, qualified home buyers coming to look at your house, the scattergun approach of having an open house isn’t the way to do it.
Home sellers and their listing agents may have opposing views on whether or not to hold an open house and the value of it to each of them. Homeowners sometimes believe that holding the home open to the public exposes it to a broader pool of potential buyers. I’m not sure that that’s true. If a home buyer is interested in seeing a home with the idea of a potential purchase they should be doing that with their agent who is knowledgeable and experienced in the condition of homes, what to expect for a particular neighborhood and that local market.
The real estate agent, on the other hand, will typically hold an open house not only to lure in potential buyers but to attract more clients as well. In fact, skeptics of open houses will say that the real purpose of the guest register by the front door is part of the agent’s attempt to pick up new clients – which it is.
The dilemma with the listing agent doing the open houses and attracting home buyers who are interested in the house creates the possibility of dual agency – where the listing or seller’s agent represents both the seller and the buyer. Not good in my opinion. It puts the agent in the position of trying to represent the interests of two different, opposing sides who are focused on getting the opposite result: The seller wants more money; the buyer wants to pay less.
The other side of that coin is that there isn’t another agent who’s going to know more about your house and how to properly represent it than your agent.
A hunt for research into the effectiveness of the open house as a home sales tool highlights the lack of available information. The National Association of REALTORS® finds that 45 percent of buyers use the open house as an “information source,” but fails to mention the percentage of these folks who actually purchased the home because we don’t track that data.
Tim Ellis – who reviewed a study done by a large San Francisco real estate firm – found that geographic location has a lot to do with whether an open house will sell a home. If the home is in a busy location you’re more likely to have more people coming in – logical, right? It also depends on the weather and the price of the home. If the weather is bad you’re not going to get many, if any, people to come out; and the higher the price, the fewer the interested parties. Add bad or high price with cold and rainy weather, and you might as well stay home and tell your realtor to forget it.
Ellis reports that San Francisco homes that are held open are more likely to sell than those that don’t have an open house.
In Las Vegas, on the other hand, only 3 percent of homes are held open, so naturally, homes here are more likely to sell without an open house.
“Everywhere else, the picture gets a little more fuzzy. In the other eight markets we examined, there was virtually no difference in the percentage of homes that sold, whether they had an open house or not,” Ellis claims.
Overall, this particular study shows that an open house is a must if you live in San Francisco and it’s a waste of time for Las Vegas homeowners. What about everywhere else? “It likely doesn’t really matter. . .” says Ellis.
Just as some hair stylists cut hair better than others and some lawyers are brilliant in front of a judge while others fall apart at the thought of it, some real estate agents are better at holding open houses than others.
Overall, it is effective marketing that sells a home and the most potent weapon in your marketing arsenal is your real estate agent. Whether or not he or she lists open houses in the marketing plan should have less to do with the agent’s effectiveness than their overall marketing chops.
Are you thinking of buying a home or selling your home in the Silicon Valley Real Estate Market? If you haven’t hired a top producing Northern California real estate agent yet, contact me, and I’d be happy to discuss the real estate market history and the current state of the local market!
About the author: The above video “Do Open Houses Work?” was provided by Vicki Moore of eXp Realty California. With over 20 years of experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise. We service the following Northern California areas: Roseville, Rocklin, Granite Bay, San Mateo, Foster City, Redwood City, Pacifica, Burlingame.