Selling A Home: Should You Have An Open House?

Can anyone remember when open houses were not used to help sell a home? Help is the operative word, as holding an open house is not a primary marketing tool to sell a home. More and more agents are saying they are a waste of time, especially successful agents who feel like holding an open house is more like fishing for prospective clients than a potential buyer of the home being held open.

My personal experience is, as much as I would rather be doing something else with my weekend afternoon time, open houses have led to sales and new clients. The relationship of house sitting hours to finding a buyer or new client is not very good. For me, I would estimate it at about 65 to 75 hours per “catch.” This means Open Houses may not be the most effective use of time for me or my sellers, but there are other reasons to consider them. You can't always count on agents to sell your listing. Sometimes agents don’t know their clients well and don't show them a listing that might work for them. In addition as all agents know, clients change their minds and don’t always tell us. A certain number of buyers find the home they ultimately buy on their own and often at an open house. Finally buyers sometimes will not make an appointment to see a house if the listing information is not exactly what they are looking for. This same buyer will stop at an open house because there is no commitment and may be surprised to find they like the house much more than they did when they were reading the listing.

Some sellers wonder if the Open House is worth the work and inconvenience. Some even complain that agents only do open houses to pick up clients, not to sell their home. Others worry about having items being taken from their homes. Other sellers expect their Realtor to hold open houses, so agents, regardless of their personal feelings about sitting on homes, will do what makes their client happy. “My seller thinks they're important, so I do them” is what many Realtors feel and say when it comes to open houses. But then there are sellers who wonder why they should open their homes to the public if most people coming through are not serious buyers. Preparing for an open house is a great deal of work because the house should be “perfect” and then you have to be away for most of a day, not to mention wear and tear on the house and the risk of theft. "You get Lookie Lou's trying to pick up some decorating hints and curious neighbors who always wanted to know how your house looks on the inside," said Eric Tyson and Ray Brown in their book House Selling for Dummies (Hungry Minds, Inc., 1999). One client who declined using the open house as a marketing tool said. “I don’t want to lose control of who is actually coming into my home.” Clearly not having open houses is easier for the seller and agent.

The opinions of Realtors/agents are as diverse as sellers when it comes to doing the Open House. One agent said people attend open houses to compare the house to the one they really want to buy, to gain a better understanding of what is on the market before making a decision, to see what their neighbors house looks like and finally to get decorating ideas. Since none of these is valuable to the seller he recommends avoiding the hassle of open houses.

So what are other agents saying about holding an open house? I found the following agent comments on the internet in various articles. "I do not see any need for open houses right now, houses are selling quite rapidly and sellers can focus on other items of importance." Another agent says she "very rarely" has open houses now because buyers shopping on the Internet can see pictures or take virtual tours of homes. But then there is this, “The open house is the best way to market a home, the more people we can get to look at their house, the more opportunity they have to sell the house and get top dollar for it." Here is one agent who says it pretty straight, "I don't believe in Open Houses. They rarely bring buyers." Here are a few more, "The more potential buyers you can get to view your home, the better chance you have to sell it” and “Open houses can provide instant feedback to sellers, as well as word of mouth once neighbors know it's on the market.” And finally "I hold an open house when I have a nice house in a nice area; I don't like to hold them for homes when people are still living in them. I don't want to have to watch their stuff."

A survey conducted in Texas by the Real Estate Center at Texas A&M University (recenter.tamu.edu) says, “Although open houses are popular with sellers, they appear to be losing their appeal among agents. Sellers see the open house as an indication the agent is actively promoting the listing. Agents know, however, the odds are long that an open house will produce a buyer.”

The National Association of Realtors polled agents and found that open houses led to only 7 percent of all home sales. Referrals were sited as the biggest sales factor at 29% of all sales. In a 2005 profile of Home Buyers and Sellers, also conducted by the NAR, 42% of home buyers found open houses to be "Very Useful" as an information source and 55% said they used open houses as an information source in their search but of the nine categories in the chart showing where buyers first learned about the home they purchased, open houses were not even listed.

The Texas survey which had 36% of all Certified Residential Specialist license holders in the state respond, found that 97% had held open houses but only 41% said they were effective. According to the article associated with the survey, “Survey Slams Door on Open House” (http://recenter.tamu.edu/pdf/1258.pdf), “While 32 percent agree that public open houses attract many potential buyers, 62 percent believe most people attending open houses are not serious buyers. In fact, three out of four (77 percent) of the respondents say most open houses are held merely to appease sellers.” In addition the survey found that three out of four agents think open houses are effective in interesting buyers in homes other that than the one being shown.

The Open House has been a staple of selling homes for a long time and although we are seeing agent resistance and even data demonstrating they are not very effective I don’t see them going away anytime soon. As long as there are sellers out there who see value or at least believe there is value in holding an open house, there will be agents who sit in houses on weekend afternoons.