For as long as I have been in real estate, many sellers are of the opinion that an open house will bring the perfect buyer who will offer full price into their home. This is the furthest thing from the truth. While sellers everywhere might be shocked by this statement, let me explain why an open house is not only a waste of time, but a waste of a day.
Who Shows Up to Open Houses?
The people that show up to open houses are the people least likely to buy a home. Neighbors, passers by looking for design ideas, or other sellers who have their home on the market in order to scope out their competition. According to the National Association of Realtors, only 1% of people that come through and open house will actually make a purchase. That is a staggering disadvantage for sellers from a marketing standpoint.
Why Is it a Common Misconception that Open Houses Will Make a Home Sell?
Easy. Blame your local cable company. While stations such as DYI network and HGTV are great resources for do it yourself projects, decorating shows and the like, they are the worst depiction of what an open house will or will not do. Sellers watch ready, willing and able buyers stroll through a house, make comments and ultimately net in an offer on the property. This isn’t your typical 1% of buyers that buy an open house, these are buyers who were looking at the house prior to the open house and the sale is simply televised to promote a picture of success for property flipping and investing shows.
Watching these shows, give sellers a false sense of security when it comes to their perception of an open house and what it will do for them when they sell their home. The truth is, they would be better off staying home for the weekend and be prepared for normal showings.
Why Agents Hold Open Houses
There are two reasons that an agent will hold an open house:
1. To generate buyer and seller leads for the future (since some of them will convert in a few years)
2. To make the seller happy.
It has been my experience that the latter is more true than the former when it comes to selling a property. Sellers believe that open houses will help them sell, so they set it up as an expectation from their agent. In the interest of customer service, the agent will oblige, and in the end it benefits the agent far more than it ever will their clients in the way of collecting names and numbers for follow up and referral business.
So if Open Houses are Not Good, What Then?
Today’s buyer begins their search on the internet. Over 80% of consumers generate their interest in a property online. They will then hire their own agent, and will have access to the most powerful search tool available to them via their agent; the Multiple Listing Service (MLS). Why do I make a point of this?
Because good buyer’s agents are going to narrow down the search for their clients home by inputting a specific set of criteria for their buyer that will come as close as possible to their needs and wants list. If the listing agent misses fields, or details, the sellers property won’t come up as a possibility in the search. So sellers, instead of having expectations that an open door will sell a house on a random weekend, pay more attention to the data sheets your agent sends to you, detailing your MLS listing and all of the details about your property.