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Can you change my mind about the uselessness of open houses?

Challenging the status quo

Real Estate Open HouseI am the smartest man in the world, for I know one thing, and that is that I know nothing. Give yourself a few bonus points if you know who I just quoted and consider that my disclaimer. I’m about to do something that I’ve done before and I’ll probably do again. Perhaps it’s because of Seth Godin and his “challenge the status quo” approach, but I question things. I don’t always do things simply because that’s the way they’ve always been done. I want to know why we do the things we do. And today, I want to know why an open house is seen as such a necessity.

A Proper Open House Production

Now, let’s not get into how to host an open house the right way or how to effectively market your open house. That’s been covered wonderfully by Ken Brand and you can read it right here on AG. When I host an open house, that’s a post that I’ll be consulting. There’s also an article in the current issue of REALTOR® Magazine called “Open Houses that Work.”

The Debate at Hand

It seems that a lot of the reason we hold open houses is to catch the looky lous who don’t have an agent yet. So essentially, we’re not so much marketing the house we’re holding open as we are prospecting. That’s all well and fine with me, but let’s focus on the core intent of an open house – to market the listing and get it sold! Besides, I don’t think it’s all that effective for prospecting looky lous either. Getting a neighbor who is looking to sell their home might be the most likely scenario. But again, let’s focus on the immediate home selling results of an open house.

The Reason to Ruminate

I’ve seen it said that buyers browse open houses. Do they? I’ll tell you what buyers do browse – the internet. 90% of them if you like numbers. For more numbers, consider this. According to NAR’s 2009 Profile of Home Buyers and Sellers, 77% of home buyers purchased their home through a real estate agent or broker. So what does that mean? That means that 77% of buyers had the privilege to request a showing with their agent, thus eliminating the need to make it to an open house. They can see the house pretty much anytime their little heart desires. I can see why that would decrease any sense of urgency a buyer has to get to an open house, can’t you? Why do I need to go to an open house with other people when my agent can show me the house tomorrow on our own time?

Enlighten Me

Hey, I’m an honest guy. If you can change my view on open houses, I’ll gladly tell you I’ve seen the light. But don’t do it just for me. Do it for the others who are reading this post and wondering the same thing. If we’re doing this mainly for prospecting, then say we’re doing it mainly for prospecting. There’s no shame in that, whatsoever. But, do we still believe buyers look for open houses? If I was looking for a home today, I would search online, narrow down my list, and seek out an agent to show me the houses I want to see.  I wouldn’t worry about an open house when I can see the house anytime. Isn’t that how a large percentage of buyers did it in 2009? Wouldn’t you think that number will go up in 2010?

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What’s your philosophy on open houses? Effective as ever or gone the way of the dodo bird? Does your open house success come from actually selling the home or from gaining potential leads via the open house? Or have you struggled to see success with open houses either way?

Don’t be afraid to spill the beans. You might be saying what someone else is thinking. The comments are waiting.

Written By

Michael is a copywriter turned social media maniac who digs marketing. A graduate of the University of Alabama, he has a degree in advertising with a minor in psychology. His theory: combining traditional advertising and old school values with the technology of today is a great way to go about your business. So what's he doing here? He's a real estate agent trying to find his way. He's taken his license and marketing ideas to @Homes Realty Group in Huntsville, Alabama. He's here to learn from you, the AG community, and hopefully share useful information with you in return. You can find Michael talking marketing at MichaelBertoldi.net and his real estate blog is ThisisHuntsville.com

38 Comments

38 Comments

  1. Erica Ramus

    May 5, 2010 at 9:36 pm

    I have one agent who does open houses, and has been successful. Not at selling THE HOUSE that is open but in snagging buyers for her future pipeline.

    I have never sold a house through an open house. In 11 years. Period.

    I do know 1 agent who sat in her first open house ever, newly licensed, and sold the house. Maybe she was unaware she was not supposed to sold the house. In 6 years she hasn’t sold another one since in an open house. Go figure.

    • Michael Bertoldi

      May 5, 2010 at 9:45 pm

      So, you’ve not once sold a house from holding an open house in eleven years and you know another agent who has sold one house via open house in six years. That’s not a great ROI if you ask me.

      I imagine we’ll have another post or two from some who have had some success, but we’ll see. Thanks for chiming in Erica!

  2. David Blishen

    May 5, 2010 at 11:29 pm

    I am in agreement Michael.

    Open houses to me are a complete and utter waste of mine and my client’s time. In particular, the more rural areas (like where I am) where you are just opening your door to the nosy neighbors and nothing more.

    I don’t see how I could justify spending 2-3 hours, supposedly focused on one open house, and at the same time distancing myself from all other genuine enquiries from serious buyers and sellers. The genuine buyer for the house I am hosting the open house at could be waiting for me back at the office or waiting for an email response. I am assuming here of course that if you are hosting an open house you are totally focused on that house and not spending your time on the phone with other clients, emailing etc, while you are there.

    The idea that it is a worthwhile lead generator is also something that I am a little skeptical of. Sure, you could potentially pick up some leads, but, I can tell you, I would much rather focus my time on my real lead generators which for me are referrals and online exposure.

    As you have correctly pointed out Michael – serious buyers research online because that is where the all the information they are looking for lies.

    Anyway, that’s just my take on it. I know there will be those that swear by it and good for them.

    • Michael Bertoldi

      May 6, 2010 at 11:01 am

      Indeed David. It is tough to justify.

      I thought we would see some people piping up for the other side, but none yet. We’ll wait and see.

      Thanks David.

  3. Joe Spake

    May 5, 2010 at 11:41 pm

    I think many agents are pressured into doing open houses by sellers who have some intense feeling that the open house will get the house sold. I have found that agents eager to do open houses are more eager to find prospects than to sell the house they are sitting. I agree that internet marketing is the way to go. I think a good online presentation: great pictures, picture or video tour, single property site, syndication, etc. is much more effective in enticing sincere buyers into checking out the property.

    • Michael Bertoldi

      May 6, 2010 at 11:03 am

      Good to see you Joe!

      I agree. Some sellers may think open houses are the way to go, then they’re disappointed when it doesn’t produce any buyers. However, I can see how a seller would want an open house. They probably want anything and everything that could possibly produce a buyer.

      And of course, I agree with all you said about a good online presentation. Thanks for stopping by Joe.

  4. Ed Daniels - Metrowest Boston Homes

    May 5, 2010 at 11:58 pm

    Can’t help you… open houses are a great source of business for OTHER agents, not me. 12 years in the business and I can spend my time much better than that. Socializing with sphere, church picnics, brunch with friends, showing homes to a buyer client, education… all better uses of time. Don’t enjoy the dead spaces of no shows and/or answering questions for another agent’s buyer client. That Realtor Magazine couple that spends hours preparing for the open house is the only way to make it a success, but still low ROI.

    • Michael Bertoldi

      May 6, 2010 at 11:06 am

      I see your point Ed. Seems like you think open houses are not only ineffective but inefficient as well. A total time waster.

      I agree the way the couple in Realtor Magazine did it and the sort of checklist that Ken Brand laid out in his post are the way to do it if you’re indeed going to do it. Just not sure the ROI is great for an open house anymore.

  5. Benn Rosales

    May 6, 2010 at 11:25 am

    I think the reasoning for hosting an open house is flawed in the minds of most agents. You’re not hosting an open house for yourself, you’re doing it for your seller. From that point of view, if it is simply seen as a service to the seller and you do seller things while you are there then you are demonstrating a value to the seller- something tangible. It is also an opportunity to meet the neighbors, investigate problems with the home that could impact the asking price, reevaluating the presentation of the home and its maintenance again an opportunity to give the sellers first hand feedback.

    My position on open houses is simple that “My listings are always open” I invite sellers to put balloons on my signs on any day of the week if they choose, I even leave an open house arrow in the garage to place beside my sign anytime they chose, and I also invite them to host their own any time they chose. I also invite them to have bbqs, and parties while their home is for sale if occupied.

    This idea that it should be a grand production that only happens once is ridiculous – it was an open house the day I placed it on the market. Keep it clean and always expect company I always say.

    I also support any opportunity my sellers can create to make the home wide open – I’ll support the marketing, and even come out and place directionals, craigslist, and mls notices of open houses.

    If you get a lead from an open house, so be it, if you do enough open houses, you should be delivering those leads back to the other listing etc… That sounds like real estate to me.

    • Michael Bertoldi

      May 6, 2010 at 11:37 am

      I understand demonstrating a service to the seller, but like you said, your listings are always open. I think that’s the point I’m trying to make. Aren’t all listings always open? We should urge sellers not to ever decline showings because you have to show to sell. With that being said, an agent can call, schedule an appointment, and bam, that buyer has their very own open house!

      “Keep it clean and always expect company.” – Exactly

      And I guess I can see reinvestigating things that could affect the price while you’re there, you’ll probably have plenty of time for that.

      Another great point is the mindset that it’s suppose to be this grand production that opens once. If that’s the case, I agree with Bruce below – it should happen in the first week or two.

      Thanks Benn.

  6. Bruce Lemieux

    May 6, 2010 at 11:27 am

    Open Houses are largely ineffective. Here’s some reasons to have them:

    Reason #1 – Having an open house the first weekend makes it easier for qualified/motivated buyers to see your home. If a home enters the MLS mid-week with an open house the first weekend, this makes it easy for agents to send buyers through. If the buyer comes through, sees the home, likes the home and sees other buyers (neighbors), it can heighten urgency. I’ve sold many homes to buyers who come through the first open house. Would they have seen it without the open house? Probably. Still, it was worth it to me to personally highlight the home’s features, talk about the great sellers, great neighborhood, etc.

    Reason #2 – Provide as a service for homes that are hard to show. If it’s difficult for buyers to schedule showings given the seller’s situation (elderly, home business, etc), then having regular open houses is a way to provide access in a structured, scheduled manner.

    Reason #3. Meet the neighbors. OK, this doesn’t help sell the home. If, however, you have a listing in your “farm”, this gives you the opportunity to meet them in person which compliments your other marketing strategies.

    Some sellers really like open houses because it’s *action* — it’s something tangible that they understand. I don’t do many, but I do have them on a limited basis. As I tell my sellers, if Open Houses actually sold houses, I would have them every weekend — it would be a no brainer. But, since they don’t, they are a very small part of our listing strategy.

    • Michael Bertoldi

      May 6, 2010 at 11:40 am

      Great point with #1 Bruce. In my young career, I have heard that the most active a listing will be is in the first two weeks. If you’re going to do an open house, I’d do it when it first comes on the market.

      I see your point in #2 but still think that could be ineffective. And #3 is focused on lead generation, not so much selling the house, which you’ve pointed out.

      I’m with you Bruce. It’s tough to justify it as this big event that gets the home selling party going, but if I’m doing it, I’ll try to do it in the first week or two.

      Thanks Bruce.

      • Bruce Lemieux

        May 6, 2010 at 11:57 am

        #2 is rare, but you may have a listing that is made more difficult by the seller’s situation. I had one seller who’s daughter was recovering from an operation and had a hospital bed setup in the living room, so having a few more open houses was one way to make the home available. Your home must be seen to be sold, so what do you do when a home is hard to see?

        • Michael Bertoldi

          May 6, 2010 at 12:58 pm

          I totally agree Bruce. I meant ineffective as in hard to sell that house. Period. I’m with you and that seems like the best way to get the home seen.

          I haven’t said I wouldn’t do an open house. I’ve already done one for someone else. Just wondering if it’s as necessary as the industry makes it seem.

  7. Dunes

    May 6, 2010 at 12:49 pm

    I think those “Paying for Services ” will determine which Services they place value on (right or wrong) and you can debate the whole day long about how they don’t need it or it’s a waste of time but if THEY think it’s a Service they want then they will pass you by and find someone who does Open Houses…

    Who’s working for who and who’s SELLING SERVICES to suit the needs or desires of their clients, are things going so well for Agents right now they can tell potential clients…
    “Naw I don’t do that it a waste of time” To complete wouldn’t it be better to say sure I’ll do that and then put on the thinking cap and figure how to turn it into something that works to your advantage?

    So maybe you are right and Open Houses are a complete waste of time but is it a Service or an available option you will not provide because you do not NEED the clients…Anyone can offer whatever Services they want so go ahead and be a limited Service limited option Agent, put a sign on the door…”I will not do Open Houses cause they are a waste of time”

    It seems to me that in RE “needs” does not always mean what YOU think they NEED when selling Services it sometimes means what does the Customer want and what do I “NEED” to do to fill it..(no matter how silly I think it is)

    What ever happened to “Every person who comes through the door is a potential customer” there are no doors at an Open House or you don’t need the clients?

    But I’m not someone claiming Marketing Skills/Expertise so most likely I’m wrong

    • Michael Bertoldi

      May 6, 2010 at 1:08 pm

      Actually I wouldn’t say you’re wrong at all Dunes.

      And if you’ll look back at the post under “A Proper Open House Production” I said “When I do an open house…” meaning I will host open houses. Not if, but when.

      Seems like you’re pretty passionate about either open houses or giving a seller what they want and I’m with you on the latter. If a seller wants an open house, you better believe I’ll give them an open house. I’ll look at Ken Brand’s post and make sure I market the open house like crazy. I’ll dress it up proper and do the best I can. I never once said I would not host an open house. With that said, I don’t think I’ll be hanging any signs stating that I won’t do any open house.

      I think you’re missing my point Dunes. It’s not about whether or not I’ll host them, because again, I said “WHEN I host an open house.” I’m simply questioning how effective they are and if they really work to get the house sold.

      So let’s shift the focus here. I have said I agree with you – it’s a service and some clients want that service. Benn touched on that in his comment. And it’s a service I offer without a doubt.

      The question is, do you think it really works to get the house sold?

  8. Benn Rosales

    May 6, 2010 at 1:19 pm

    Bruce is ultimately correct about that first two weeks, and if you’re priced correctly in the market place, that will be absolutely correct and your need for an open house should be moot because you have a solid offer and are in contract. Seriously, if it’s still on the market, the price is to high, and the first 14 days is a telling sign. Be open and be ready to accept that offer. If you’re going to do an open house, all parties, including the sellers should be ready to make real estate happen otherwise it is just a tangible service that delivered nothing but a home still on the market.

  9. BawldGuy

    May 6, 2010 at 1:56 pm

    Geez Louise Myrtle, people. Gimme a freakin’ break. Let’s talk about a couple of the 900 pound gorillas in the room, OK?

    Full disclosure: The last time I held an open house, Ford was in office. Also, this is a hot button for me, cuz most agents won’t admit why they hold them in the first place.

    Analogy — you’re not mechanically inclined, so you have an experienced auto mechanic, referred by a trusted buddy, to take care of your car. You’ve always heard that changing your oil every 3,000 miles is the proper approach. He tells you, “For Grandpa, yeah, but things have changed.” You insist on your way, which will waste your time/money, while lining your mechanic’s pockets. For Heaven’s sake, Mercedes cars don’t even warn you to change oil ’till you’re approach 10,000 miles between changes. But you know best, so you instruct the experienced pro how to do his job.

    I held open houses to impress the folks in my farm, and get more listings, period. I TOLD my sellers that. In seven years listing/selling homes I sold one open house. Hell, ya gotta trip over an open house sale in seven years, right? Most of my opens were held in football season, especially rainy weekends. Why? So I could watch the Chargers on a color set. 🙂 Meanwhile, the neighbors streamed in and were impressed by how ‘hard’ I was working to sell the home. I averaged roughly .5 homes listed per open.

    Agents hold opens cuz they’ll generally do anything, including hold other’s listings open, to avoid cold/warm calling, door knocking, hell, even following up internet leads. They have no stomach for workin’ in the trenches, where the big dogs play. If you’ll notice, they will use any form of marketing/prospecting that avoids them risking anything akin to rejection. Wanna know why the turnover rate in the real estate biz is so high? That’s a major reason, if not the primary one.

    The seller insists? Gimme a break. Who’s the pro here? Grow a pair, will ya?

    If I was a house agent today, I’d get those who avoid what generates actual business, and have them do my bidding. They’d be welcome to the leads. I remember what Dad used to laughingly tell his seller clients about open houses. “You want me to market your home, or sell it?”

    Agents: Do you wanna do BigDog business, or play at being a real estate agent on the weekends?

    Michael — you have it dead on.

    • Michael Bertoldi

      May 6, 2010 at 2:09 pm

      Bawldguy, you’re my hero.

      But seriously, what can I say to that? You’re not afraid to to point out the elephant, or 900 pound gorillas in the room, and I can appreciate that. I can’t say I’ll never do an open house, but it’d be nice if they’ve got direct tv.

      Thanks for taking the time to enlighten us bawldguy. There’s not much to say as you’ve pretty much covered it all!

    • Benn Rosales

      May 6, 2010 at 3:05 pm

      lol BG is back.

    • Janie Coffey

      May 7, 2010 at 12:22 pm

      there is a local Realtor here who just this past weekend, had three potential sellers stop by to ask about his listing services at an open house he did. How is that for proof of the gorilla?

      I think that (as BG has pounded in my head) if you farm an area well, having an open house is an added farming tool which might lead to more sellers, more buyers and just maybe a buyer for that particular house.

      I also think it is VERY geographically specific. Some areas are hotbeds for open houses, some are just looky loos and some just don’t work well at all. Before you decide to hold them or not, I’s spend a few weekends looking around for them, seeing which days and which times are most often held and how they are advertised to double your exposure by having them at the same time as is customary in the area (ie someone is driving to one and sees your sign and stops by as well)

      I’d also really try to figure out how the locals find the open houses they go to (ie one community we used to work in used the community center bulletin board to advertise, EVERYONE went there to see what was open)…. Spend the time and do your homework for your particular community before you decide one would or wouldn’t work.

      Oh, one more thing, I’d make Fridge Magnets using Avery’s magnets for the listing and hand them out (make them cute) and you have just extended your coverage and exposure for you and your listing to your farm.

  10. Dunes

    May 6, 2010 at 2:30 pm

    “The question is, do you think it really works to get the house sold?”

    I think that is something the RE Professionals can determine through experience or possibly the data available to them and do not presume to know the answer to that specific question.

    I’m just saying that IMO, in this Market, with as many agents that there are competing for business……Perhaps the answer to that specific question does not matter…Yes or No there is a “NEED” to do them if asked and to offer them as an option to compete. I’m also suggesting that from a Marketing point of view (Claim no expertise) perhaps publicly declaring them useless may just alienate any potential clients who may see that on an open venue (internet where how many people research homebuying/selling) and be alienated (He thinks they are useless so even though he says he’ll work hard I’m thinkin..alienation)

    I wasn’t discussing right or wrong but discussing Marketing….Lani wrote a nice Blog on Public/Private discussions/internet..What if people could see your Private chat…I wonder why what may best be a “Private chat” would be done in public.

    To inform the public you think Open Houses are useless so they are Protected from what?
    Added expense? Some may in this market (Heard rumors the Market was tough) might argue if it increases the chance of a sale for their client .01% so their credit or life isn’t destroyed or they can get one client… Open houses are useful

    I think it’s moot, it’s a Service and to compete you offer it or you are not a Full-Service Agent….I think most people (potential clients based on their situation) will not be as concerned with anyones findings as much as they will be concerned about exploring every option to solve what they see as their situation and knowing without a doubt that Agent will do their best (That should be reinforced)…I think you publicly have created doubt you would and it does not matter one bit if that’s completely untrue….
    Perception of the potential client is what matters…Perception is a POWERFUL thing.

    • Michael Bertoldi

      May 6, 2010 at 2:44 pm

      I will gladly discuss the situation with a potential client. I’d probably say “Sure, I’ll hold your house open and I’ll market the open house like a mad man, but I don’t think it will sell the house. Here’s why…” And, I’d probably add that if we’re going to do it, we need to pick a date right when it gets to the market.

      That’s called open and honest. I’m really not afraid of losing clients due to this post. Why would I be afraid to say something publicly that I’d say to them in person anyway? I’d rather get it out there in the open that I don’t think the success rate for an open house is very successful. Just like I’ll blast on the internet that I’m a new agent. If I’m honest they’ll find that out during the listing interview anyway right? Don’t most sellers want an experienced agent?

      So if you don’t have an opinion on whether or not open houses are useful, does that mean it’s just a dog and pony show?

    • Benn Rosales

      May 6, 2010 at 2:58 pm

      Consumers don’t know what they don’t know about the business of real estate, and we’re happy to debate the future of the business right out here in the open as “we write beside the consumer”, these are issues that effect them and we welcome consumers to formulate their own opinion and they can chose how they wish to weigh things like an open house versus online marketing, or even the types of on and offline marketing they value.

  11. Dunes

    May 6, 2010 at 3:31 pm

    “So if you don’t have an opinion on whether or not open houses are useful, does that mean it’s just a dog and pony show?”

    I said I did not presume to know the answer to your specific question and that RE Pros (You) might….

    That does not mean “it’s just a dog and pony show?”

    If you want to discuss openness and honesty and transparency then let’s discuss “preferred vendors” or confirming competing offers actually exist or Marketing expense Agents claim to have or Code of Ethic violations/enforcement or or or

    Open Houses? I’m not deciding any Agent is open or honest because they came out against Open Houses but I may decide I don’t want that person representing me so I’m not gonna call if I’m thinking I want or need to try every option (You’re not gonna reassure me without me calling for that interview)…It’s just an option!

    Would you like a rough estimate of how many Agents have said to me at Trulia or in a discussion I was in…”I’m really not afraid of losing clients due to this post.”

    Enough that are no longer Agents that all I can say is…That’s nice, glad you’re doing so well …

    In a Forum like this or Trulia or Zillow or ActiveRain or…when an Agent says “I’m honest or I would never, whatever” the truth is often known by a number of other Agents because they know you or about you or where yer comin from..

    ME, other people out here…We don’t know, you’re just a Real Estate Agent saying things and we need to determine everything based on what we read, are they worth calling, that sounds suspicious, of course they’d say that they want me to hire them, of course they are honest lol cause they said so……

    It’s about First Contact to establish Honesty in person so when you say “I think Open Houses are useless but I’ll do them and do the best I can” they have something more to go on to determine the validity of your claim…There’s just something about Face to Face for many that opens that door….I think the internet often closes more doors for youe industry than it opens because I think a lot RE people think they got it all figured out as a Marketing tool when the results scream otherwise….

    That being said I’ll leave this conversation to the RE and Marketing Pros

    Thank-you….You are a very civil and interesting person, I have no doubt you are an excellent Agent anyone would be lucky to have representing them (Open House or not ;)….We just disagree on the relevance/definition of if Open Houses are useless

    • Michael Bertoldi

      May 6, 2010 at 4:00 pm

      Thanks Dunes. Nothing wrong with a good debate.

      I think we’ve gotten a little off topic with the honesty and transparency stuff. I simply meant I’ll say I question how effective an open house is publicly because I mean it. As far as the other topics of honesty you mentioned, I am who I am regardless of Internet or in person.

      I don’t think the Internet closes doors because my goal is for you to know me before we meet. Therefore I won’t fake something online just for you to meet someone else in person. You’re welcome to call me yourself!

      But you’re right. We’ll have to agree to disagree on the usefullness of open houses. I’ll tell you I think they aren’t that effective just like a coach should tell you that those new shoes might not be effective at making you jump higher. Of course it’s ultimately your decision.

      Thanks for the comments dunes.

  12. Dunes

    May 6, 2010 at 4:19 pm

    Just wish to point out I wasn’t suggesting not telling them or faking anything I was discussin “my opinion” about WHEN you Discuss it and why I felt that way.

  13. Kathy

    May 6, 2010 at 5:46 pm

    I think open house only works in certain situations. First of all in some neighborhoods there are a lot of open houses, so a lot of buyers still drive around on Sundays. I only do open house for the properties that are cleaned, staged, and are in top shape. Those listings will sell no matter what, but they attract enough people to walk through to possibly lead to a bidding war, and with a lot of nosy neighbors coming through it’s a good opportunity to get your name out.

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