Why Open Houses Aren’t Worth it for Sellers ?>

Why Open Houses Aren’t Worth it for Sellers

“Without an open house, your home will not sell, period.”

Are you sure about that?

HomeLight conducted a nationwide survey of the best real estate agents across the country about the need to know issues that surround today’s housing market. Of the 133 top real estate agents that participated in HomeLight’s Top Agent Insights Survey, 63% of them said that they do not always recommend sellers host an open house.

In Short, Are Open Houses Worth It?

Most of us thought that open houses were the opportunity for real estate agents to throw open the doors of their home and get it sold right then and there. The theory is that serious, prospective buyers will flood in with their checkbooks and after a few hours of touring rooms filled with the scent of hot cookies and fresh baked bread, they’ll buy the house.

That would be ideal, wouldn’t it? The truth is that open houses have become more of a way for agents to connect with new clients than anything else. Top real estate agents feel that open houses are a waste of time if solely used to find a buyer for your home.

In real estate, an open house is when a real estate agent welcomes in prospective buyers (and the general public) to a home listed to sell. It’s been the accepted method of marketing a home since the early days of home ownership, but real estate agents want to dispel that myth.

In our Top Agent Insights Survey, HomeLight asked top real estate agents across the nation to answer questions on the state of the housing market and the process of buying or selling a home.

Here’s what we found out about open houses:63% of top real estate agents don't always recommend open houses

63% of agents said that they do not always recommend that sellers host an open house.Top real estate agents do not think open houses are very effective

Most agents also swung towards the “completely useless” end of the open house spectrum. On average, agents voted open houses a 4.4, where 0 was “completely useless” and 10 was “absolutely essential to sell.” The highest percentage of agents rated open houses a 3 on that question. 52% rated open houses below five. At least half of agents think open houses are not useful.Top real estate agents think Sunday is the best day to host an open house

75 percent of agents chose Sunday as the best day to host an open house. We interviewed top agents and asked them to elaborate on why Sundays work best. The overall response was that Sunday is the nationally accepted day–it’s as simple as that. Elizabeth Weintraub, a real estate agent who ranks in the top 1% of agents in Sacramento, even calls Sunday open houses “America’s religion.”

Open houses are an opportunity for prospective buyers to get up close and personal with a property, fall in love with the crown molding and carrera marble countertops, and put in an offer. That can happen sometimes, but open houses don’t always help sell a house. As it turns out, serious buyers aren’t always even at open houses.

Do Open Houses Help Sell a House?

Location and character matter. Elizabeth Weintraub shares, “If they are tucked away in a sub division and there’s a bunch of them on the market and they are all the same configuration and same sale price, an open house isn’t really going to do anything and it’s going to be a waste of time.”

The more unique a home is and the closer it is to busy populated areas, the more an open house can do for the property. Strip a home of character and put it in a line of identical constructions and an open house is about as useful as a phillips head screwdriver when you needed a flat.

Think about your situation. Is your house in a gated community where it would be difficult for prospective buyers to get in? Is there a large inventory of homes for sale in your area, and would yours stand out among them? Even if you have a unique place with turn of the century crown molding near a popular watering hole of restaurants and shops, an open house could do more harm than good.

We asked Elizabeth to expand on her statement, and she told us about a time when an open house was a terrible idea.

Case Study: When Open Houses Don’t Work

Elizabeth showed her flat to prospective buyers in a private showing. The design was exquisite, with window coverings, coordinating rugs and avant garde art. Then the tenants moved out, and their belongings took the soul of the place with them. Move out-day was the night before the first open house.

“The house was just horrible. Here was this place that was so gorgeous a few weeks earlier. And once they removed everything they had…the place looked terrible. This was 6 o’clock on a Saturday night and we had our open house scheduled for Sunday at two, and there was no way to cancel it. And we couldn’t get stagers in there. So we went ahead with the open house. And buyers came through and they were walking in the kitchen and they were telling my open house agent, the kitchen is atrocious, I hate the kitchen!”

What does that story tell us?

Open houses give buyers the opportunity to pick apart the flaws of a place. The open house for Elizabeth’s flat was inevitable, and it did more harm for the property than good. Open houses that don’t showcase the best of a property are not useful, and even when they are staged with an expert eye, open houses don’t always sell a house.

Are Open Houses Effective for Buyers, Sellers, or Agents?

How Open Houses Work Out for Buyers:

Dan Ihara, a seller’s agent in the top 1% of agents in Oahu (and self-described surfing expert), recommends that serious buyers stick to private showings. He says, “for our buyers, actually, we’d rather them not go to the open house. We’d rather do private showings….You have so many distractions when you are at an open house.”

Private showings allow buyers to work directly with a buyer’s agent. As Dan points out, “buyers agents are trained to be the advocate for the client, so we want the client to know everything that’s good and bad with the property, not just good.” Most agents view open houses as a waste of time because these serious buyers aren’t even present. Open houses are bad for buyers.

How Open Houses Work Out for Sellers:

Sorry, sellers. Unless your real estate team creates a dream marketing plan to draw eyes and foot traffic to your home, and we mean over 100 people, an open house probably won’t do you much good.

Open houses draw nosey neighbors, curious onlookers, and prospective buyers who aren’t sure what they want. Having said that, sellers in a specific type of community might benefit more than others. As Jim points out, “That’s where an open house with waterfront can be…beneficial, because those are people who are pretty specific about what they want and it’s limited supply. There’s only so much waterfront.”

Unless you live in an area like lakefront in Florida, buyers aren’t usually specific enough in their criteria to know that your place is exactly what they’re looking for.

How Open Houses Work Out for Agents:

Jim Weix, a top seller’s agent in Florida, spoke to us about who open houses benefit and it’s not who you think. Open houses “might be [a waste of time] for the seller, but they are not for the agent, because the agent will get leads and can get sales off of the people coming through those open houses.”

Real estate agents benefit the most from using open houses to network with potential clients. Though the main end goal is to market a property to buyers, 95% of the time that’s not what happens because of the diverse, distracted crowd at an open house. Agents benefit, yes, but most agree that if the seller does not, open houses aren’t worth it.

If open houses only seem to benefit the real estate agent hosting them, why should you even consider one?

Open House Prep Makes the Difference

That four hour block where the real estate agent stands with a handful of fliers and lemon candles burn on the kitchen island won’t help you sell your house. But all of the work leading up to it will.

Dan Ihara “create[s] a frenzy” by marketing the home with signs, email campaigns to past clients, and notifying neighbors. He also recommends sellers clean the property enough to look like a “showroom.” Make windows sparkle–especially those with views–clear clutter, and stage the home to pull on the emotional heartstrings of the buyer.

As Dan says, “Logic makes people think, and emotion makes people act.”

Even though the actual Sunday open house isn’t going to sell your house that very day, the process of cleaning, staging, and making your place shine will make for amazing photographs and productive private showings.

Are Open Houses an Effective Way to Sell Your House?

The open house sets a deadline to clean, market, and stage your property. The work that goes into planning and preparing for the open house is the biggest benefit to you as a seller. No, you probably won’t sell the house in the moments after the open house but all of that build up will spread the word about your property and encourage prospective buyers to schedule private showings.

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