You’ve seen it dozens of times before—the balloons, lawn signs, nosy neighbors, the decadent scent of freshly baked cookies wafting out the front door on a Sunday afternoon—it must be an open house!
But what is an open house, exactly?
The history of open houses dating back to the 1910s
Open houses are one of the oldest real estate marketing tricks in the book. The long-standing tradition began in the 1910s as a perk that came with signing an “exclusive contract” to sell a home.
Prior to the dawn of open houses, anyone could be a real estate agent, so you didn’t need to have a broker’s license to sell a home. As competition among real estate agents became more fierce, exclusive contracts allowed real estate agents to bind themselves contractually to a family and their property to guarantee they would make money off the sale.
With this exclusive representation, agents started to label homes as “open for inspection” and invite the public to tour the home. The first open houses would last days or weeks and were primarily be used to sell new homes that would pique the public interest in the developing architectural styles of the time.
What’s the definition of an open house today?
Today, a real estate open house is a marketing event held for a short period of time (usually 2-4 hours on the weekend or in the evening during the week) for the general public to pop by and view a house for sale. Open houses differ from home showings in that they’re not appointment-based and anyone can show up. Guests get a full tour of the house and may be served refreshments.
An open house is hosted by the listing agent, who represents the seller of the home. It’s the listing agent’s job to show visitors around the house, point out its highlights, and answer potential buyers’ questions about the home’s history, updates, and condition.
The purpose of an open house is to generate buzz and drum up interest in a home to secure a competitive offer, but in some cases an open house may be more effective in building an agent’s business than actually selling the home.
What happens during an open house?
During an open house, a homeowner, along with the help of their real estate agent, makes the property available to the general public to attract more potential buyers and ultimately, to sell the house at a competitive price.
Potential buyers get to view the home and interact with its marble finishes, crown moldings, and open hearth fireplaces to decide if it’s the right house for them.
Sounds like an intuitive marketing tactic, right? At first glance it does, but, according to HomeLight data, about 63% of real estate agents do not always recommend hosting an open house.
With the prevalence of internet listings and virtual tours, open houses have become more of a fun Sunday pastime than a sure way to sell a home. Often, open houses are a way for real estate agents to attract new clientele. If serious buyers do come through, they may be too distracted to thoroughly consider buying the home.
But, let’s say that you have a unique home on the Florida waterfront for sale that stands out from all the rest. This home is begging for some foot traffic. You want to show it off and sell it way above asking price, and we want to show you how to do it with an open house.
What are the benefits of hosting an open house?
Open houses can be beneficial for a number of reasons—potential buyers get to see the home, your agent will receive good, constructive feedback about the property, and you have the opportunity to make the home look its best.
According to Marine Yoo, one of Madison, Wisconsin’s top-selling real estate agents, an open house can be used as a tool to heighten the appeal of your home and motivate buyers to make an offer quickly.
If an interested buyer knows that your property is hot and will draw in lots of traffic, they’ll be more inclined to make a competitive offer before the open house even occurs.
“There are two ways that an open house can spur interest in a house and really help a seller,” says Yoo. “One of them is to basically spark a fire under a buyer. So, if a buyer knows that a home is available for sale and they can purchase it, and they see an open house up coming in five days they know there’s probably decent traffic coming to the open house. So the advice we give all our buyers is, see the property privately right now before all these potential buyers come on Sunday.”
Yoo says that an open house could also be used as the one and only chance for interested buyers to view the property. This way, serious buyers can get a look at the home and the competition when they make their offer to the seller.
“Realtors may opt to decline any showings until the open house, and that strategy drives a ton of traffic,” explains Yoo.
“And then it makes people who are considering buying that property see ‘Holy cow there are 40 different parties at this open house—I’m going to have to put my best foot forward to win this out.’”
For these specific applications of the open house alone, Yoo says, he does not believe that the open house will ever become completely useless and obsolete.
What are the drawbacks of using an open house to market your home?
An open house is a great way to play up the high demand for your property, but there are some drawbacks to hosting one.
There’s no guarantee that buyers will show up
Open houses have fallen down the list of effective marketing tactics for home sales. Only 3% of home buyers visited an open house as the first step of their house search in 2018, while just 7% found the home they ended up purchasing from an open house sign. This is largely due to the widespread use of listing services, high-definition photographs, and virtual tours that can be found on the internet.
So, if you’re thinking about doing an open house, you have to be sure that your home is unique and “hot” enough to attract visitors. You don’t want to spend money and disrupt your kids’ schedule for a large chunk of time if no one will attend anyway.
Open houses present a security risk to your home
Another drawback to hosting an open house has to do with safety concerns and privacy issues. Many sellers have reservations about hosting an open house because they fear that careless home viewers will damage their home or even worse—take their things. Can you blame them? If the house doesn’t sell quickly, you don’t want tons of people traipsing through your home open house after open house. Private showings are the better way to go.
Open houses cost time and money
For a lot of sellers, open houses can cost them in the form of money and time if their house continues to sit on the market. That’s especially true if the house doesn’t sell quickly and your agent hosts multiple open houses.
All of that money you spend on premium upkeep, pet and childcare, heating and cooling the home and even baked goods and drinks on the day of the open house starts to add up.
When is the best time to host an open house?
Have you ever been invited to a party that was at a great venue? It seems like an awesome time, you really wanted to go, but then couldn’t because it was at 11:00 PM on a Tuesday? We’ve all been there, and we’ve all had the same thought: Why did they do it then? That’s so inconvenient!
The same applies when you’re hosting an open house. If your real estate agent knows their stuff, they know that you need to host an open house when potential buyers are available. The best time to host an open house is on a Sunday when people have time to walk in after running their morning errands.
In larger metro areas, traffic tends to pick up in the afternoon. So, if your property is in the city, you’ll want to host your open house anywhere between 11:00 to 3:00 p.m.
In the suburbs, traffic is not as much of a concern. Host your open house between 12:00 PM to 4:00 PM.
Additionally, you’ll want to keep your open houses to about two hours. According to Yoo, you want potential buyers to know that there is a limited amount of time for them to see the home. Your home is valuable, and give buyers what they think is an exclusive look at an in-demand house.
What can a seller do to guarantee a successful open house?
So, you’ve picked a date—you’re going to host an open house! Here are a few things you should do before you let all of those strangers flood into your house and onto your beautifully polished hardwood floors.
Deep clean your home
It should go without saying, but your home must be spotless before potential buyers arrive. No one wants to see dust bunnies scampering around your baseboards when they walk through your home room by room.
89% of agents recommend thoroughly cleaning your home because the buyer’s first impression can mean the difference between selling and not selling a home. If you need to, hire a professional cleaning service to get the job done—though that will cost you between $20 and $45 per hour.
Invest in home staging
Yoo says that “buying a home is an emotional decision” and you definitely want potential buyers to experience positive emotions when they come to your open house.
That means you really have to “wow” people when they cross the threshold into your foyer. The National Association of Realtors says that staging your home increases its value by 6 to 10%. When guests enter your home, you want them to be able to picture what their life could be like in your spacious, stylish home.
That means hiring a staging company to change out and rearrange your furniture, paint your walls—we recommend a nice neutral beige tone—and let in natural light.
Advertise your open house on the internet
As of 2017, 95% of home buyers used the web in their search for a new home.
That means there are a plethora of ways to advertise your open house on the internet—including the multiple listing service (a digital platform where brokers/agents share information about what homes they’re listing and showing) and the top real estate listing websites that share open house event details such as Trulia, Zillow, and Redfin.
You can also post your open house on places like Nextdoor, Craigslist, and Facebook Marketplace. Consult our guide on how to do an open house right for more details on marketing your open house on the web.
If you have a real estate agent, they will do the advertising for you. We recommend promoting the open house 3-4 days before the event to give people plenty of time to make plans for stopping by.
Promote the event with physical signs
Even though the internet is a reliable, efficient information resource for open houses, lawn signs on the day of your event are a must.
There’s nothing a buyer finds more frustrating or anxiety-provoking than when they can’t find the home they’ve been dying to see. Be sure to set up ample signage (between 20 and 40 signs depending on your neighborhood) guiding people to your open house.
You want to make sure to keep your messaging simple (for example your sign might say “Open House Next Left”) and the signs should be bright colors (oranges, reds, and blues) to tastefully stand out. Who knows? You might even attract some passers-by who had no intention of stopping in!
What’s an agent’s job during the open house?
An agent’s job during an open house is to be the steward of your home. That means that he or she will be welcoming guests into the house, answering questions about your home, and keeping track of guests that enter and exit the property. This way, the agent will be able to follow up with potential buyers who seem interested in their client’s home.
“They all have to sign in no matter what, or else they’re not getting to tour the house,” says Yoo. “Any good Realtor worth their salt will hunt that buyer down—and I use that obviously as a joking manner—to the ends of the earth to see if they have any further interest to try to sell the merits of that house to that buyer…they could also keep in touch with them.”
The agent will also put any last-minute touches on the home to be sure that the ambiance is prime for showing. Often, an agent will open up shades and windows to let in natural light and (depending on the season) fresh air, or bake cookies to create an initial “visceral reaction” according to Yoo.
Broker’s opens: An alternative to the traditional open house
So, let’s say you have a raised ranch on a block of almost identical raised ranches. Your interior is spectacular because, well, you’re a decorating genius, but there’s really nothing to make your home’s exterior stand out from all of the others. In this case, an open house might not be the best way to attract serious buyers. What other option do you have?
Enter the broker’s open.
By definition, a broker’s open is an open house but for other real estate agents and professionals in the industry. During a broker’s open, your agent will provide a gathering of local industry professionals with lunch or dinner while they view your home. Agents are invited to see if they have any clients who might be interested in buying your home. Your agent will usually host a broker’s open mid-week within the first week or two that your home is on the market.
In some instances, a broker’s open is more lucrative than an open house because the event can lead to more private showings and serious offers. Or, if you’re having trouble attracting buyers, your agent’s peers can give them constructive feedback to make your home more marketable.
You’ve done all the hard work for your open house—leave the rest to your agent
Have you ever been at an office potluck and said something critical about someone’s homemade creation without realizing that they were standing near you? Yikes! That’s awkward and uncomfortable.
It’s difficult for people to be critical about something they want when the owner/creator is in the same room. The same goes for when you try to sell your home.
Yoo says it’s extremely uncomfortable for potential buyers to know that the owner is at the open house because they cannot be “open” (no pun intended) with the real estate agent about what they find displeasing. If buyers know the owner is there, it might prompt them to rush through the house, leave prematurely, and focus on the negatives of your home.
“People just do not feel comfortable talking about a property and being critical about a property—even if it’s just being constructive—if the homeowner is there. And that rushes them out of the house, it makes them have a bad impression on it…do not be inside the house or anywhere visible.”
You’ve done all the hard work—scrubbed the floors, baked fresh cookies, staged your home, hired a window washer. Now it’s time for your real estate agent to negotiate with buyers and sell your home.