Jeff Thibodeau - Sales Rep.

Open houses are ineffective at selling real estate.
Don't take my word for it, it's a fact. The National Association of Realtors reports that only 1% of homes are sold through and open house. I know what your thinking: "But Jeff, I see in the newspaper there are more open houses then I can count every weekend, why would everyone be doing something that doesn't work?" In the next few paragraphs I'll tell you why they don't work, why realtors still do them, and how not having one could even save you from becoming a victim of a crime. Read on…

There are only three real reasons to hold an open house, form a Realtors point of view.

1. We don't know any better: Open houses made perfect sense before the digital camera, the internet, and buyer representation. Attending an open house was sometimes the only way to show your property to potential buyers. The world moved much slower and buyers eagerly toured homes on Sunday afternoon searching for the right one. So many Realtors do the same things they always have done to sell a house, even though the world has changed around them. Now buyers can search online (87% start their search online) and get lots of high quality photos, floor plans, room sizes, everything. Buyers no longer need to come see a house to know it won't fit their needs. When a serious buyer wants to see a house they will call the Realtor and book a viewing. On to number two...

2. To meet new clients: This is the big one for realtors. The fact is, 99% of people who come to your open house will not want to buy it. But for a Realtor it can be a great source of new clients. They typical mix of people who come to open houses goes something like this:

   • 1/3 are neighbours checking what kind of furniture you have and how clean your carpets are,

   • 1/3 are tire kickers who are "just looking" and enjoy touring other peoples homes on Sunday afternoons (before becoming a Realtor I was guilty of this),

   • 1/6 are people who are just starting to look for a home, not ready to buy for another 3-12 months, educating themselves on what they can get for their $$$,

   • 1/6 are actual real buyers, unfortunately half of these people are window shopping way above their price range and the other are using your house to compare against ones they really like.

   • Realtors make the open house guests sign-in, they will tell you it's for security and safety, but really, if your Rolex goes missing during an open house good luck finding which of the twenty people took it. That is, assuming they left their real name and phone number. This guest list is really a lead sheet for Monday so they can call them back and sell them a home they actually like and can afford. Many Realtors build their whole careers on open house leads, using your house as their Sunday office to find their next client.

3. We want to please our clients: This one I'm blaming half on you (the home seller) and half on the Realtor. Home owners think that open houses are great because they see other people doing open houses so they tell the agent they want one, the Realtor replies with "Anything you like Mr. Seller" then under her breath grumbles but justifies it by hoping to meet a few new clients.

From the very start of my real estate career I knew open houses were useless, but I did them to please my clients, that makes me guilty of point 3. I also didn't know any better and senior agents were telling me they were a great source of new leads (points 1 & 2). Only through my own experience and research did I find out what a waste of time they are.

Open Houses Are Dangerous

There are many recorded cases of theft from open houses, the very nature of the event is to allow stranger to roam unchecked through your home. Most of us would never leave the front door of our home open even to take the dog for a walk but we are perfectly happy welcoming 20 strangers in on a Sunday afternoon, and letting a Realtor stand guard. There have also been reports of burglars coming to open house to check for valuables, electronics, etc. only to come back an another date to finish the job. Open Houses are also dangerous for Realtors, there have been cases in the past and recently of Realtors being threatened and even assaulted at an open house.

But It Can't Be All Bad

There are some circumstances where an open house can work to your advantage, and these are the only times I'll I've hold one:

• New construction subdivisions, i.e. the model home to showcase the builders talents and upgrades and wow you with professional decorating.

• A superheated sellers market. When homes are selling in less then a week and for more then full price it can be a successful strategy to list your home for sale but not allow any private showings until after the first open house. This way all the serious buyers come on the same day and you may even get multiple offers driving the price up

• A "Realtor only" open house, usually in the day during the week where local Realtors can check out property for the their current and future clients. This works well if you are using an out-of-town Realtor (which I advise against)

"Okay Jeff, I believe you now and I'll never have an open house again. But how do I market my house to potential buyers?"

Stay tuned for my next post where I'll show you how you can have people tour your home seven days a week, whenever is convenient to them, have no risk of theft, and weed out the 99% of buyers who who will never make an offer and focus on the 1% who will. Welcome to the future.

If you have any questions or comments about this post email me @ jeff@jeffknowsrealestate.com

I'm Jeff Thibodeau, and I know real estate!

Jeff Thibodeau is a Sales Representative with Re/Max Twin City Realty Inc. in Ontario Canada providing honest, straightforward advise to homeowners across the country.