Question: Do Houses Sell from an Open House?
A client asks: "We are about to list our home for sale and have interviewed 4 different real estate agents. One of the agents made a huge deal out of holding an open house for 5 hours on Sunday. Another agent said she doesn't do open houses because they don't sell homes. Two of the agents said they will do an open house if I asked them to do it. We're leaning toward the agent who will hold a 5-hour open house for us, but she doesn't have as much experience as the other 3 agents. What do you think? Which agent should we pick? How important is an open house? Do houses sell from an open house?"
Answer: Whether houses sell from an open house is an interesting question. I will cut right to the chase. An open house doesn't hurt a home's chances of selling, but whether it actually sells the house is debatable. It's not unthinkable to sell a house at an open house, but it is unlikely. The reasoning has to do with the people who go to an open house.
Who Goes to An Open House?
Most buyers who are seriously shopping for a home are working with a real estate agent. They get new listings from their agent as new homes come on the market. Their agent takes them out to look at homes, and they get private tours. Generally, by the time a house is held open, a serious buyer has already seen it.
Sometimes, agents will put a home on the market with instructions that no showings will be allowed before the open house, but that applies more to seller's markets and is not the norm.
Apart from the occasional active home buyer, here is a list of other likely candidates who attend an open house:
Neighbors. In some neighborhoods, the neighbors make up the only people who go to an open house.
Lookie Loos. I joke about the California Sunday pastime of going to open houses, but lots of people just love looking at other people's homes.
Passersby. These are people who might by driving or walking by the home and notice the open house sign. They are probably not in the market to buy a home and are simply curious.
Real Estate Agents. Agents you did not list with might stop by to see how you have prepared the home for sale, and other agents who did not have time during their busy work week to see your home might come by to introduce themselves.
Future Home Buyers. Many first-time home buyers start by touring open houses to figure out which neighborhoods they might prefer and what kind of house they might want to buy. It gives them good ideas for when they are ready. Which is not now.
Robbers and Thieves. What better way to case out a home than to attend an open house and examine the goodies a thief might want to stuff into an empty pillowcase in the middle of the night, than in the comfort and convenience of an open house, where such people can be unknowingly welcomed inside by the seller? Thieves give open house sellers 2 thumbs up.
Who Benefits Most From an Open House?
It's not the seller. Unless the seller's home is located in an extremely popular neighborhood with busy streets nearby, it is unlikely that the open house will draw much of a crowd. It is possible that the buyer who cruised through might come back later to buy, but that probably would have happened even without the open house.
Many real estate agents hold open a house for two reasons:
To build the agent's own business.
To make the seller happy.
Some agents go to great lengths to showcase an open house. You might see colored helium balloons and ribbons attached to the for sale sign or the front porch to attract attention. The agent's personalized real estate signs are often set up at major intersections to direct traffic and get the agent's name out in the public's eye.
Agents hope that neighbors will come by so they can talk to the neighbors and find out if the neighbors are interested in selling their own home. Agents get the opportunity to meet future home buyers who could become clients a few months from now.
If a potential buyer pops in who is not interested in that particular home, the agent is hoping to impress the buyer enough that perhaps the buyer will be willing to work with that agent and buy a home through that agent. The agent probably can't wait to show that buyer a different home.
So, you've got ask yourself, in whose interest is that?