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Report: open houses may not help sell homes

As thousands of homes commence Nationwide Open House weekend, some question the validity of open houses as a selling tool, and it turns out that as with real estate, the answer is always local.

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The science behind open houses

As over 31,000 homes open their doors this weekend for the “Nationwide Open House Weekend,” one brokerage asserts through their new report that the effectiveness of an open house is not consistent from city to city. Looking at a quarter of a million listings in nine cities across the nation, Redfin donned their “we’re scientists” hat from 2007, and revealed that not all cities are created equal.

First, the brokerage noted that some cities rank highly for volume of open houses, while others barely use them at all:

  1. San Francisco – 83 percent of listings hold an open house
  2. Boston – 63 percent
  3. Seattle – 53 percent
  4. DC – 44 percent
  5. Queens – 41 percent
  6. Portland – 32 percent
  7. Los Angeles – 29 percent
  8. Chicago – 22 percent
  9. Austin – 21 percent
  10. Phoenix – 5 percent
  11. Las Vegas – 3 percent

Product Manager for Statistics and Trends at Redfin, Tim Ellis wrote, “Apparently every weekend is open-house weekend in San Francisco. In fact, holding an open house is so expected there that homes that don’t hold an open house are a full seven percentage points less likely to sell than those that do. In Las Vegas and Phoenix, where open houses are rare, the exact opposite is true. Homes that don’t hold an open house are 17 percentage points more likely to sell than those that do.”

Ellis added, “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.”

Additionally, the national brokerage dug deeper to find that homes that held an open house within the first week of listing rather than later performed far differently:

Should Realtors hold open houses?

“So should you hold an open house?” Ellis asks. “If you’re in San Francisco, absolutely. If you’re in Phoenix or Las Vegas, probably not. Everywhere else, it most likely doesn’t really matter whether or not you hold an open house, but if you’ve got a good agent, he or she will probably hold one anyway.”

Tara Steele is the News Director at The American Genius, covering entrepreneur, real estate, technology news and everything in between. If you'd like to reach Tara with a question, comment, press release or hot news tip, simply click the link below.

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45 Comments

45 Comments

  1. Roland Estrada

    April 28, 2012 at 4:51 pm

    I find this amusing. Most agents know the only reason we hold open houses is to troll for prospects. Anyone else that thinks open houses sell homes is delusional.

    • Jeff Brown

      May 1, 2012 at 8:00 pm

      The part I liked best was, “. . . it most likely doesn’t really matter whether or not you hold an open house, but if you’ve got a good agent, he or she will probably hold one anyway.”

      What? Huh? Classic

  2. Rudy

    April 28, 2012 at 9:07 pm

    I hold open houses 24/7 every single day until the house sells. Anyone in the world can view a full walk through of the entire home, at their leisure. They can see it once, twice or dozens of times. They’re not hounded by a pushy house salesperson – ever. They may stay as long as they’d like.

    I do a walk through video tour, professionally shot, on every single listing. I haven’t held an open house in a decade, and have no plans to ever do so. My time is more valuable than that.

    • Roland Estrada

      April 29, 2012 at 11:09 pm

      Well isn’t that sweet. You go girl.

  3. Greg Cook

    April 29, 2012 at 8:54 am

    Tara, I’ve always been taught that the purpose(s) of an open house was to 1) let the seller know you’r working 2) Generate buyer leads?

  4. Krystyna Baty

    April 29, 2012 at 3:57 pm

    Open house will increase the exposure to buyers – isn’t that what we promise the sellers?

  5. Anna Altic

    April 30, 2012 at 10:18 am

    I like this article but would love to see one about communities and markets where open houses do actually work and tricks agents use to convert business. In Nashville’s urban neighborhoods, open houses are a very useful tool and I expect anywhere from 10-50 people through depending on the location and price point of the home. I have sold at least 5 homes directly from open houses over the years and brought in millions of $$ in transactions from open houses. My advice is if you work or farm a specific neighborhood then you absolutely should be doing open houses because it’s a great way to get to know the community.

  6. Marcia Burgos-Stone

    May 10, 2012 at 6:31 pm

    They are obsolete.

  7. Christi Borden

    May 10, 2012 at 6:31 pm

    In Houston, we have so many International buyers and many of them tend to visit Open Houses first before contacting an agent so I have sold many homes to visitors of open houses who later came back to view with a Realtor and then made an offer,

  8. Valarie Kubacki

    May 10, 2012 at 6:31 pm

    I have had a ton of people come through today while I don’t believe that an open house in a rural location will sell a house it certainly will on a busy road!

  9. Eric Hempler

    May 10, 2012 at 6:31 pm

    They’re only done to try to get buyer clients

  10. Marie Mattingly

    May 10, 2012 at 6:31 pm

    I did my 1ST open house in 2006 and sold a house in Lake St Louis for $680,000. I had only been licensed 3 months. I’m a BELIEVER!

  11. Jeff Underwood

    May 10, 2012 at 6:31 pm

    I believe that video marketing will overtake traditional real estate marketing within the next several months. According to Cisco, by 2013 up to 90% of internet traffic will be video based. Video WINS! Are you going to use video or get left behind?

  12. Stacie Evans Ricci

    May 10, 2012 at 6:31 pm

    Ugh! I can’t stand watching videos. I’d rather be able to read it on my smartphone at my leisure.

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Austin

Austin tops the list of best places to buy a home

When looking to buy a home, taking the long view is important before making such a huge investment – where are the best places to make that commitment?

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Looking at the bigger picture

(REALUOSO.COM) – Let us first express that although we are completely biased about Texas (we’re headquartered here, I personally grew up here), the data is not – Texas is the best. That’s a scientific fact. There’s a running joke in Austin that if there is a list of “best places to [anything],” we’re on it, and the joke causes eye rolls instead of humility (we’re sore winners and sore losers in this town).

That said, SelfStorage.com dug into the data and determined that the top 12 places to buy a home are currently Texas and North Carolina (and Portland, I guess you’re okay too or whatever).

They examined the nerdiest of numbers from the compound annual growth rate in inflation-adjusted GDP to cost premium, affordability, taxes, job growth, and housing availability.

“Buying a house is a big decision and a big commitment,” the company notes. “Although U.S. home prices have risen in the long term, the last decade has shown that path is sometimes full of twists, turns, dizzying heights and steep, abrupt falls. Today, home prices are stabilizing and increasing in most areas of the U.S.”

Click here to continue reading the list of the 12 best places to buy a home…

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Housing News

Average age of houses on the rise, so is it now better or worse to buy new?

With aging housing in America, are first-time buyers better off buying new or existing homes? The average age of a home is rising, as is the price of new housing, so a shift could be upon us.

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aging housing inventory

The average home age is higher than ever

(REALUOSO.COM) – In a survey from the Department of Housing and Urban Development American Housing Survey (AHS), the median age of homes in the United States was 35 years old. In Texas, homes are a bit younger with the median age between 19 – 29 years. The northeast has the oldest homes, with the median age between 50 – 61 years. In 1985, the median age of a home was only 23 years.

With more houses around 40 years old, the National Association of Realtors asserts that homeowners will have to undertake remodeling and renovation projects before selling unless the home is sold as-is, in which case the buyer will be responsible to update their new residence. Even homeowners who aren’t selling will need to consider remodeling for structural and aesthetic reasons.

Prices of new homes on the rise

Newer homes cost more than they used to. The price differential between new homes and older homes has increased from 10 percent traditionally to around 37 percent in 2014. This is due to rising construction costs, scarcity of lots, and a low inventory of new homes that doesn’t meet the demand.

Click here to continue reading this story…

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Housing News

Are Realtors the real loser in the fight between Zillow Group and Move, Inc.?

The last year has been one of dramatic and rapid change in the real estate tech sector, but Realtors are vulnerable, and we’re worried.

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Why Realtors are vulnerable to these rapid changes

(REALUOSO.COM) – Corporate warfare demands headlines in every industry, but in the real estate tech sector, a storm has been brewing for years, which in the last year has come to a head. Zillow Group and Move, Inc. (which is owned by News Corp. and operates ListHub, Realtor.com, TopProducer, and other brands) have been competing for a decade now, and the race has appeared to be an aggressive yet polite boxing match. Last year, the gloves came off, and now, they’ve drawn swords and appear to want blood.

Note: We’ll let you decide which company plays which role in the image above.

So how then, does any of this make Realtors the victims of this sword fight? Let’s get everyone up to speed, and then we’ll discuss.

1. Zillow poaches top talent, Move/NAR sues

It all started last year when the gloves came off – Move’s Chief Strategy Officer (who was also Realtor.com’s President), Errol Samuelson jumped ship and joined Zillow on the same day he phoned in his resignation without notice. He left under questionable circumstances, which has led to a lengthy legal battle (wherein Move and NAR have sued Zillow and Samuelson over allegations of breach of contract, breach of fiduciary duty, and misappropriation of trade secrets), with the most recent motion being for contempt, which a judge granted to Move/NAR after the mysterious “Samuelson Memo” surfaced.

Salt was added to the wound when Move awarded Samuelson’s job to Move veteran, Curt Beardsley, who days after Samuelson left, also defected to Zillow. This too led to a lawsuit, with allegations including breach of contract, violation of corporations code, illegal dumping of stocks, and Move has sought restitution. These charges are extremely serious, but demanded slightly less attention than the ongoing lawsuit against Samuelson.

2. Two major media brands emerge

Last fall, the News Corp. acquisition of Move, Inc. was given the green light by the feds, and this month, Zillow finalized their acquisition of Trulia.

…Click here to continue reading this story…

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