In protest of open houses
Realtor Notebook
By Teresa Boardman, Thursday, May 22, 2008.I don't hold open houses; I don't believe in them. There, I said it and my secret is out. What kind of Realtor am I?
When I first became a Realtor, the manager in my office told me that if I did not change my attitude about open houses I would not do well in real estate. New agents were taught to do anything -- and I really mean anything -- to get business. I held a few "opens" every weekend in those early days, and I hated doing them.
Agents in my market complain about hosting open houses. I ask them why they do them. They tell me that their clients demand it. I tell my sellers that I don't do open houses, and I explain why. I let them know that if they expect opens as part of the marketing plan, I am not the best agent for them.
Homes occasionally do sell at open houses, but most serious buyers have an agent and buy a home after a private showing. It is in the consumer's best interest to use the services of their own agent rather than buying from the seller's agent at an open house. The Realtor makes more money by getting both sides of the deal but also increases risk with dual agency, and by working with a buyer that they do not know.
We all know the reason Realtors hold open houses is to meet buyers; only a very small percentage of homes sell at opens. It is so rare that when it happens, people talk about it for years and the sale becomes part of the open house lore. As an industry, we have managed to keep the myth alive that part of selling a home is sitting in it for two hours every Sunday afternoon. Open houses were invented during a time before the Internet, when consumers had to rely on Realtors, yard signs and newspaper ads. Those days are gone, but the opens live on.
If buyers only toured homes that are open they would be greatly limiting their opportunities. There are people who do attend open houses who are not buying. It is a hobby, something to do on a Sunday afternoon.
Some agents see open houses as a customer service item for their sellers. My clients ask me to do all kinds of things to sell their homes. I gently remind them that I sell homes for a living and have a lot of experience. I am open to new ideas and advice, but I have enough experience to know that holding a house open is not going to sell the house. I don't subscribe to the theory that the customer is always right, and I don't think that customer service is about doing whatever a client asks; I think it is about selling their home for top dollar in the shortest amount of time possible.
For some agents open houses are the way to go and I would never discourage anyone from doing them. We all need to spend time prospecting and for some, sitting at an open house is a good way. In some markets, open house attendance is high.
I prospect on the Internet, and I know that not all agents are interested in spending as much time at it as I do. We each need to play to our strengths and make the best use of our time and resources if we want to run a profitable business. I run my business on the Internet and I am the Realtor who does not do open houses.
Teresa Boardman is a broker in St. Paul, Minn., and founder of the St. Paul Real Estate blog.
Boardman will speak at Real Estate Connect in San Francisco, July 23-25, 2008. Register today.
***
What's your opinion? Leave your comments below or send a letter to the editor. To contact the writer, click the byline at the top of the story.
All rights reserved. This article may not be used or reproduced in any manner whatsoever, in part or in whole, without written permission of Inman News. Use of this article without permission is a violation of federal copyright law.
Bookmarking Sites
Add A Comment
You must login or register to post a comment.
Submitted by Don Fabrizio-Garcia on May 22, 2008 - 4:43am.
This is so very true. My time is better spent marketing the home than sitting an open house. And the seller's time is better spent doing anything instead of being forced to vacate their home for a few hours.
Submitted by Jim Lee, Knoxville TN Realtor on May 22, 2008 - 4:51am.
One of the two things I tell all my sellers I do not do to get their house sold is to have an open house.
The other thing is print advertising; I haven't ran any print ads in over 2 years now and my business has never been better.
Most sellers today seem to be relieved you're not have an open house and when you explain that over 80% of today's buyers use the Internet in their home searches, they're also OK with no print ads.
Jim Lee, CRS, ABR, GRI, NAR Certified e-PRO Trainer
Realty Executives Associates, Knoxville, Tennessee
www.KnoxvilleHomeCenter.com mailto:Jim@JimLee.com
(865) 693-3232, My Personal Toll Free # 1-800-662-2488 ext. 163
**********************************
Submitted by Karen Rice on May 22, 2008 - 4:54am.
Some homeowner associations in our area forbid open houses. I personally do them - our office strongly encourages each agent to do a minimum of 2 open houses a month. Some are great, some really are nothing but a chance to sit in a clean house that is quiet and peaceful - I take a book, make phone calls, draft blogs on my laptop, get mailings ready; I make the time worthwhile. We have sold homes due to opens and more often have gotten more listings from opens. We have met buyers are opens that ended up buying a different one of our listings. We tell the sellers how that works. Most of our homes are vacation homes so the sellers aren't there anyway, no need to displace them.
If the home is a priced according to the market and is in very good, clean condition, chances are it will sell without the need for an open. My last listing was under contract 14 days after it went on the market. I didn't even get a chance to blog about it!
Northeast PA / Pike & Wayne County Real Estate Agent
Lake Wallenpaupack Real Estate
Submitted by Michael Taylor on May 22, 2008 - 5:39am.
I am not a fan of open houses either. I currently have a client that holds his own house open every Saturday and Sunday. The only thing he has drummed up from these are tire kickers. I truly believe that time and money are better spent in other areas.
Michael Taylor
Zionsville Real Estate | Westfield Real Estate | Fishers Indiana Real Estate
Submitted by Anne and Eddie McKechnie on May 22, 2008 - 5:54am.
Hi Teresa,
Well said, and we don't do Open Houses either. A better way to service your client is to advertise using the best means possible, on the internet, where people are looking for their next home
Submitted by Todd Anderson on May 22, 2008 - 5:55am.
Todd Anderson
www.YouInParkCity.com
I have to agree, but only partially. There are homes that attract many lookers with an open house while others may see only one or two people during an open house. Alternatively our Board of Realtors sponsored open house days for Realtors in Park City are indispensable in terms of letting agents see the property and allowing them to become knowledgeable about the market. These open houses are very well attended and represent a great way to advertise the property.
Submitted by Debra Stone on May 22, 2008 - 6:04am.
When I was farming extensively, I used open houses to meet neighbors, sellers. This is an incredibly effective way to get listings. If you pre-market an open house in the neighborhood, you have the opporunity to meet sellers and to further develop your presence in the neighborhood.
Submitted by John Davison on May 22, 2008 - 6:10am.
I have made a habit of doing two open houses and a broker's open in the first month a new listing goes on the market. I utilize the feedback in my meeting with the sellers one month after the listing goes live. This accomplishes two things, (1) it appeases their desire to see me actually working on selling their house, and (2) it is a small part of a large and systematic marketing effort.
I agree that homes do not sell at open houses. As a matter of fact, I have only picked up one eventual buyer at an open house (they bought a different house). What amazes me, aside fromt he tire kickers, is the number of "buyers" that come to open houses and do not have their homes under contract OR even on the market yet. These people obviously don't understand that sellers are not going to go under contract and take their homes off of the market until the buyer AT LEAST has their house under contract. They also don't understand how long it might take them to sell their homes. In our market (FL), it could take 12-18 months to sell (although they'll all tell you how great their homes are and how confident they are that they'll sell quickly!).
I utilize these times to educate these people and hopefully pick up their listing. I also take the time to pre-qualify them as buyers, through a series of well thought out questions. One's true ability to qualify for a loan is the other side of the coin that most "buyers" underestimate. Even with the sale of their home, a lot of them still aren't qualified to buy right now.
Submitted by Ralph M on May 22, 2008 - 6:35am.
Open Houses are a waste of time and effort. Realtor.com's own statistics state about 9 out 0f 10 "Open Houses" are a failure. So Realtor.com publicizes this to their members and then adds it to their new website??
Only bring in RWA buyers,,,,,ready, willing, and able...(also pre-approved). You represent your seller's interest. Move ahead in the industry and not back.
Color your "Open Houses" any color you want,,,,but statistics show FAILURE.
Submitted by Rob Aubrey on May 22, 2008 - 6:43am.
Goo Post T,
You are so right and the operative word is "SIT". If you are going to sit then stay home unless they have a 60" LCD HDTV and the big game is on. Then send the seller out for 4 hours (in case of over time), don't run any ads, don't put up any signs, draw the blinds tight and well you know.
I do believe action causes action and I believe if you are active...
When my team holds an open we first door knock for an hour then hold the home open for an hour. Do we expect to sell the house right there? No.
But we as a team are actively prospecting and getting some exposure on the home. We know what the objective is when we go. Contacts and exposure.
But as you long as the word "SIT" is the operative word, you're right it doesn't work.
Real Estate is a contact sport, make as many contacts as you can.
Submitted by Jay Thompson on May 22, 2008 - 6:47am.
Opens don't sell the home, and there are far more efficient ways to get buyers than sitting in open houses.
Opens are clearly not for me, or our sellers and we tell them that from the beginning.
Right now there are some thieves in the Phoenix area working opens. The woman (and her baby!) distract the agent while "dad" rummages through drawers and medicine chests, stealing anything not nailed down.
Jay Thompson
Broker / Owner
Thompson's Realty
Blog: www.PhoenixRealEstateGuy.com
.
Submitted by Ralph M on May 22, 2008 - 7:18am.
Jay good post.
"Real Estate is a contact sport, make as many contacts as you can." Wrong!
Real estate is a product industry. If/when I have all of the products (that are priced right)you have to come to me to get the product..Simple economics...Supply and demand. If I have all of the products, the "Contacts" will come to me.
Submitted by Elizabeth Weintraub on May 22, 2008 - 7:20am.
Hi Teresa: Not to sound like odd guy out here, but the success of open houses really depends on where you work. Having lived in Minneapolis, I agree with you that an open house in the Twin Cities rarely leads to a sale.
However, where I specialize in Land Park (Sacramento, CA) lots of homes sell at open houses. It's almost a religious experience for many Californians. Go to church, brunch, buy a home at an open. Perfect Sunday. I can't count the offers I've written at an open house dining room table.
Elizabeth Weintraub
Broker-Associate
Lyon Real Estate
Sacramento, CA
http://elizabethweintraub.com
Submitted by Jeff Bonham on May 22, 2008 - 7:31am.
Open Houses are one of many valid options we have as agents for lead generation tools. I agree that very rarely does an open house sell the house, and that they are often used to solicit buyers, but what is wrong with that? The last I knew we were IN the lead generation business. Now, If you already have a full arsenal of tools that are driving your lead generation efforts and you have more than enough business, than that is great for you. Stick with what works. But the statistics actually do show Open Houses are low cost, if not free, viable sources of quality leads, and I hope even when you sit one that is not heavily trafficked, you are maximizing that time by calling your database, prospecting via the phone and internet, etc so that it is not a waste of your time. According to the last NAR Buyer Profile Survey, 47 out of 100 prospective home buyers did go through open houses during their search process and of those 47, 7 found their agent at an open house. Also, 5 out of 100 sellers found their listing agent by touring open houses. So, even though those numbers may not excite you, it becomes a game of knowing your numbers. If you have 50 people go through and you aren't converting any of them into clients, you can say your conversion rate is lower than expected and you better develop skills and scripts to capture that lead if you plan on continuing to work opens. In this shifting market, leads, any leads, are a precious commodity. And if you master the art of the open house, they can be for you, too. Whatever lead generation method you use, know your numbers so you can always focus on improving your game. Whether it is number of cold dials to listings, number of web hits required to get a closing, number of appointments to listings, or number of people through an open house until you get an agency agreement, know your numbers and then you can begin to predict your income and determine what method of lead generation best suits you to meet your written goals.
Jeff Bonham
Team Leader/Busines Consultant
Keller Williams Syracuse
jeffbonham@kw.com
Submitted by Bill Lublin on May 22, 2008 - 8:13am.
Bill Lublin CRB,CRS,GRI
CEO CENTURY 21 Advantage Gold
Visit my Blog at MovePhilly
Search for Homes in Pa & NJ
Teresa; I both agree and disagree with you (I'm so schizophrenic)
The benefit of an open house to me is threefold
One, it provides visible evidence of the agent's efforts
Two, with a laptop and a cell phone, even an Open House with little foot traffic can ge used productively
Three, as you point out, it might generate some buyer contacts.
Thant being said, I think tat any activity should be weighed by each person based upon their market and their preferences. Anyone with your expertise could certainly spend their time better. A newer agent who could use a couple of hours in a situation where they might meet a consumer, or if not could spend the time working on calling customers or clients, or working on their laptop, might find some benefit in the activity.
Fell squarely on both sides of that question didn't I?
Submitted by Jay Sunderland on May 22, 2008 - 8:18am.
It sounds like open houses are the same everywhere. If I'm going to sit around for a couple of hours by myself, I'd rather do it in a boat on a lake! I used to turn the open house into an event. Food, baloons, chocolate fountains, the works. In 5 years, I got one Listing lead from opens, and I never sold a listing that way. I no longer do that.
Submitted by Teresa Boardman on May 22, 2008 - 9:05am.
Jeff you bring up a point. yes an agent can master open houses. It took me most of my adult life to figure this out but I think most of us spend too much time trying to master the things we are not good at and not enough time developing our natural talents. Hence I have spent many hours doing opens and trying to be good at them. if I had spent the same amount of time working on my natural abilities I think I would have come out way ahead.
Submitted by Julia O'Day on May 22, 2008 - 9:18am.
Well, I guess I am one of the "myth makers". As a brand new agent, I sold my first house ever to a couple who came to my open house and loved the house (not even my listing- I was sitting for another agent). I am currently negotiating a deal on a house I held open and met the buyer. I have also sold a different house to a couple I met while sitting an open on a lakefront.
I think it is a good way to meet buyers. I have been holding opens on a lakefront that is over priced- since the beginning of March, I have had over 80 people through the house. That is 80 people I would not have had contact with otherwise. Many of them live in my neighborhood, which is good exposure for me. True, many are tire kickers, and a bunch didn't give me enough contact information to follow up, but I have several long term leads I am continuing to work. Another positive from the open- we are using the volume of open house guests with no offers as one of the tools to convince the seller to lower the price.
Our company has a strong Open House program. For new agents who do not have referrals or a lead generating system yet in place, opens are a good way to start generating name & face recognition, meet people and get out there "doing something".
Julia O'Day
Weichert Realtors
West Milford, NJ
Submitted by Teresa Boardman on May 22, 2008 - 9:37am.
Julia - you bring up a good point. When I started I did a lot of open houses. They did not work out so well for me, mainly because I am not very good at them and often no one showed up. In some markets open houses work very well. In my market it varies by neighborhood too. If I wanted to do an open this weekend I know which one of my listings I could do that would get traffic. If it works for you do it and congratulations!
Submitted by Diane Tuman on May 22, 2008 - 9:43am.
Hi Teresa: I have had 7 houses in my lifetime and even though my Realtor held open houses on all (just one for each!), they sold to someone who was already extremely interested once the for sale sign was installed in my lawn. But, my agent held an open house anyway during the first week to "drum up competition," and then she would receive bids a few days later. This seemed to work for me!
Submitted by Gia Freer on May 22, 2008 - 10:03am.
Hi Teresa!
I too have found that I do not sell homes at open houses either. In addition, I let my sellers know well in advance that open houses are somewhat of a misnomer and explain why. I do however advertise extensively on the internet for them and that seems to work out great for my clients and my business. The opportunities that the Internet has presented to all of us now are tremendous.
Gia
Submitted by Jonathan Miller on May 22, 2008 - 10:03am.
Teresa - I think you are spot on (no surprise there).
I had a debate with someone just yesterday about this. I am not an agent but I always saw open houses as a sign of weakness, that perhaps the property was over priced or had a defect. I always saw it more as a technique for agents to meet buyers for other properties. I would think that most sellers expect an open house or the agent isn't "doing their job" but that's old school thinking.
Submitted by Steve Belt on May 22, 2008 - 10:04am.
I market property via an appropriate mechanism for the market. I'm not going to say I won't ever do an open house, nor am I going to say I will alwyas do an open house. During the huge fenzy period we had in Phoenix recently, open house was a very effective way of selling my listings. Open house directly resulted in multiple offers and/or higher priced offers than would have otherwise happened. Open house directly resulted in offers that never would have been made, primarily as a result of the manic pace that the market was in, and how poorly agents were serving their clients.
Today's market is dramatically different. Open house is largely ineffective for the typical listing, and I don't do them.
However, one market segment they are working well in right now, is marketing short sales. They'd probably work well in marketing a foreclosure (I've seen a few agents do them, but never talked with them about their success), though I don't have any in my inventory, so I don't know. When my office decides to do a short sale open house, we advertise in the local paper, and the phone will ring like mad with buyer's that are looking for a great deal (30 calls that day isn't uncommon). There's pent up demand out there by buyer's looking for a great deal, and a short sale listing appears to be the easiest way of conveying to the public this is a good deal (even if it really isn't). In fact, it has me thinking I should advertise all of my (priced at the bottom of the market) listings as a short sale. Then again, maybe not.
Submitted by Steve Belt on May 22, 2008 - 10:13am.
This topic just reminded me of another agent I know at my company. I think he's the overall top producing agent in the luxury market in Arizona, and perhaps of all agents in Arizona as measured by gross sales volume. For some reason, I only recently met him, and found him extremely approachable. I also noticed he sits his $10M listings open on the weekend. That's right $10M listings.
I asked him about it in email this week. His reply, "54 years old, 20 years in business and yes, I'm still in them...It's the best way to meet people." I was flabbergasted.
I should note that nearly all of his listings are vacant homes that he built, so there isn't an inconvenience to a seller (other than himself) to hold them open.
Submitted by Joe Hildebrand on May 22, 2008 - 11:51am.
Hmmmmm.....this seems to be a very polarizing issue! It certainly appears by some of the comments that some haven't even held opens and are commenting based on the experience of others or what they have heard.
Open houses may be "old school" but it is still a way to market a home. In this market are you so busy you cant hold an open? Are you selling 100% of your listings?
I sold 4 listings from open houses last year! I even sold one of my own listings on the spot! I know the R.com numbers but with the # of listings on the market even 1% of homes selling due to an open house is a lot of homes!
I have found agents don't like to hold an open because they either dont know how to hold an effective open house or they would rather hide behind their phone, email, web site, etc...
Finally, I have discovered that quite often neighbors have a good idea who wants to live in that neighborhood. Personally, I hope people continue to have their misconception on open houses because it means more sales for me, more listings, and more buyers!
Submitted by David Sherfey on May 22, 2008 - 12:36pm.
We put our open houses on the internet using websites we create ourselves. The url on the sign in the yard is all interested neighbors need to find out how we work, and we often get another listing in the neighborhood. When they haven't noticed the sign, the mailings to the neighborhood during the listing period will catch their attention.
When sellers ask us to do open houses, we do them, thanking them for inconveniencing themselves so we can do a little potential lead generating. We take work with us so the time is not shot when nobody shows.
Submitted by Ken Jacobs on May 22, 2008 - 2:32pm.
Open houses are anything but a waste of time for many reasons that benefit both the real estate agent and the seller. Not all houses are good for open houses. The home should show well, especially compared to similar homes in the neighborhod. It should have sufficient upgrading and be professionally staged to show at it's best. To dismiss the idea of any open houses up front, though, is doing a serious disservice to sellers, and taking away an excellent marketing opportunity for the agent.
While it's true that I can count on one hand the number of times in 10 years in this business that a buyer has walked in and said "I'd like to buy this house today", a number of other very important things happen at open houses quite frequently:
1.) A buyer comes through whose agent doesn't work weekends or hasn't shown them the house as the agent is too busy. The buyers come through alone, leave and call their agent to write an offer immediately. That has happened to me frequently. Now maybe the agent would have gotten around to it, but why would I want to wait for someone else to kick-start my sale?
2.) Many, many "tire-kickers" as I've seen them called here go to open houses with no intention to buy a home, but then see something that drives their interest and the next thing you know, they're on the phone to their husband, wife, mother, or whoever, and then to their agent to help them figure out how to make it happen. (This just happenned to me this week, as a buyer's agent, so I'm thankful to the agent that held that property open last weekend!) By the way, this is also the way I bought MY current house, as my wife visited an open house and called me - YOU'VE GOT TO SEE THIS", she said. We weren't thinking of moving, and she wasn't planning on visiting an open house that day. Next thing you know, I'm on the phone with my mortgage broker and writing my own offer!
3.) It's an excellent marketing opportunity for the agent to showcase their staging and marketing skills, especially if this is a neighborhood you frequently sell property in. It also allows future sellers to see the importance of preparing a property to sell by upgrading the condition and staging. That makes that conversation a lot easier down the road, when they've seen the difference it made to other properties in their own neighborhood.
4.) Many buyers use the internet to start looking before they pick an agent, and use open houses as one method of "interviewing" an agent to use. If you're not picking up any of those leads, then you should adjust your interaction, as you simply aren't attracting buyers to you.
I love going up against agents that don't do open houses in listing presentations, as I can tell all the actual stories of situations like those described above. I can see the light go on for sellers when I discuss this, and they relate to their own visits to open houses in the past.
Submitted by Lori Turoff on May 22, 2008 - 3:03pm.
From the prior comments is apparent that some agents find value in holding open houses. What you get out of an open house may be a sale (rarely) or contact with potential buyers (of whom only a few are real buyers) or just some quiet time with a laptop and cell phone to catch up. I happen to find them a useful tool in my arsenal even if not the most valuable. An open house can be a vehicle to assess visitors reaction to the property and then use it to provide as feedback to the owner.
If an agent is not good at doing open houses and doesn't come off as warm, friendly, sincere, welcoming etc. an open house may not be the best way for that agent to spend his or her time. If that's the case, they might be better off getting a colleague who is better at it to host the open house.
In dense, urban areas like New York City or Hoboken, where I do business, open houses are common. There is real pressure from sellers to do one every weekend for as long as the property is listed. They expect it. They see it as evidence of your commitment to marketing their property. The listing agent can try to persuade the seller that open houses are unnecessary but it's a tough pitch to make when every other condo for sale in town is holding one. Many sellers just don't get it and if you won't do it they will simply find another listing agent who will.
My solution has been to do the open house on a scheduled basis. We agree on the schedule when I draw up the listing agreement. I hold more when the property is just listed and when the price reduced. Then I try to use the time and experience as profitably as possible. Maybe I sell the unit, maybe I don't, but a neighbor may walk in who is thinking of listing and my mere presence in their condo building gives me the chance to make a favorable impression on them. Every contact with the public is a potential marketing opportunity - be it at the supermarket, in the dog run or while hosting an open house. As long as agents out there are willing to hold them they are not likely to go away!
Lori Turoff
Robert DeRuggiero Realtors
Hoboken NJ
http://hobokenrealestatenews.com
Submitted by George Donaldson Jr. on May 22, 2008 - 4:18pm.
Boardman has hit the nail squarely on the head. Oh, but the seller wants open houses, SO WHAT. It's the business of the agent to decide how to best get the property sold, not that of the seller. End of story.
Submitted by Ruthmarie Hicks on May 23, 2008 - 1:21am.
I'm a big believer in all real estate being local. All markets are different,and the same holds true for open houses. There are several neighborhoods around here where open houses are a great place to meet buyers and sellers and MAYBE sell the house you happen to be showing. Other areas,you will sit and had better bring something to do or you'll die of boredom. It all depends on location, location, location.
Submitted by Ralph M on May 23, 2008 - 6:35am.
"Boardman has hit the nail squarely on the head. Oh, but the seller wants open houses, SO WHAT. It's the business of the agent to decide how to best get the property sold, not that of the seller. End of story"
So true.....Good post.