Are open houses really necessary?
The answer is “it depends”.
When it comes to hosting an open house, there tends to be three main types of agent approach, with each yielding vastly different results for the seller and agent.
Open House 1:
The listing agent is hosting an open house because the seller has asked for one, but this agent doesn’t really believe in open houses having much value toward a sale.
Often, the listing agent will allow a junior agent in their office or team to host the open house so that they don’t personally have to host it. As you’d expect, these types of open houses tend to be poorly planned and executed, with the extent of the marketing usually being three to five open house signs leading to the property and the agent relying entirely upon people passing by to notice the open house and wander in. The chances of the people who happen to be passing by at that time being the actual buyer for the home is slim at best.
These agents typically ‘sit’ the open house rather than ‘work’ it, with little interaction between the agent and potential buyers. Unsurprisingly, homes with this type of open house rarely sell from the open house. Often, if the open house is being hosted in this manner, it’s a good indication that the agent isn’t doing much to market the home in other ways either.
Open House 2:
The agent sees open houses as a way to find new buyer clients for OTHER properties. This agent will typically market the open house by listing it in the MLS, and placing approximately three to five open house signs around the neighborhood. When people enter the property the agent will welcome them but typically not discuss the features and benefits of that property; any discussion is usually limited to self-promotion, with the goal of collecting the buyer’s contact information in order to begin marketing their services as an agent to them. Because the agent’s goal is to find new buyer clients for their own business, and not to sell this house, they rarely sell the subject property at their open house events. Agents who do this are often also ‘buying the listing’; an industry term that means the agent has told the seller a much higher price than the home is worth because they know that sellers will often list with the agent who tells them the highest price. Buying the listing is done because the agent knows they can pick up some buyer clients from open house events at the property to make it worth their time, even though they know that the home they have listed won’t actually sell for its asking price. This type of open house is entirely self-serving for the agent and does not help the seller to sell their home.
Open House 3:
The agent is hosting an open house with the purpose of selling THAT property. The agent defines a buyer profile and then markets the open house extensively for several days, even weeks, prior to the event. The open house event is heavily marketed on social media, and critically, to a target audience based upon the buyer profile for the home, rather than just to anybody; this is significantly more likely to put the home in front of its buyer. The ability to do such a promotion involves a significant amount of training and a high level of understanding of social media marketing that the vast majority of agents do not possess. Most agents mistakenly think that ‘boosting’ a post on Facebook on another social media channel is the same thing; it is not. Open house invitations are given to neighbors and potential buyers within the agent’s database; door hangers are placed on neighboring homes.
On the day of the open house, the event is held for a minimum of three hours and at least twelve open house signs are placed leading to the property, making it as easy as possible for people to find the home.
During the open house event, the agent uses marketing techniques to make the home appear inviting and to make potential buyers stay longer, such as scented candles, food and drinks. If a buyer stays to eat or drink something, it creates a more relaxed environment; when the buyer relaxes in the home, they start to imagine living there and they become more likely to make an offer.
This type of agent ‘works’ rather than ‘sits’ their open houses. Every person who enters the home is greeted and given information about the property. Feedback is obtained from every single group who tours the home, and their contact details are collected so that the agent may follow up with them about that home. While potential buyers tour the home, the agent talks with them and gets them to open up about their property needs, creating opportunities to further sell the features and benefits of the home to them. After the open house, the agent follows up with potential buyers.
Often, due to the high level of buyer targeting, combined with an effort to make the buyers feel relaxed and comfortable in the home, this approach to an open house event often results in an offer on the property from someone who attended the open house event.
Is it worth having an Open House?
Ultimately, the type of approach to the open house event, and the quality and skill set of the listing agent, make the difference between the home selling at the open house or not. Your home absolutely can sell at its open house, if you have hired the right agent.
If you’re considering selling your home, it’s a good idea to visit several open houses and test out the style of several listing agents before committing to working with one. Ask them how many homes they’ve sold from open houses, and what marketing they did for that open house event. The answers to these questions will be very telling!
If you’re thinking of selling a home in Orange County, CA, come by and visit one of my open houses to ‘mystery shop’ me and check whether I'm the right Realtor to sell your home. I have sold properties at their Open House (writing up contracts during the Open House!) and to people who found the properties from my Open House events.
You can contact me HERE for a free, no-obligation chat about your Real Estate needs.