Editor’s note: This is the second of a two-part series. Click here to read Part 1.
There was a time when homeowners listing their properties for sale could automatically expect their agents to host open houses. Not today. I posted a query online for the nation’s real estate agents, asking them if open houses work — and nearly drowned in the enthusiastic and detailed responses, both pro and con.
Last week in this column, I presented five points made by agents who favor planting the open House sign in the lawn. This week, I offer five considerations from agents who say: Don’t bother — times have changed.
1. Many agents said open houses have an excruciatingly low conversion rate.
Statistics on open houses as the single selling tool are hard to come by, but a recent study by the National Association of Realtors concluded that most buyers won’t be found at opens at all. NAR’s latest Profile of Home Buyers and Sellers concludes that 54 percent of consumers who bought a house from mid-2008 through mid-2009 through a real estate agent never or rarely attended open houses.
Agents who responded to my query — even many who were gung-ho about holding open houses for other reasons — agreed.
"To me, an open house is akin to a newspaper ad — it has a 1 to 3 percent ‘hit’ rate (or a 97 to 99 percent ‘fail’ rate)," said Tina Merritt, an agent with Long & Foster in Virginia Beach, Va.
2. People who attend open houses probably aren’t serious buyers, many agents said. Both pro and con, they agreed that curious neighbors will dominate the turnout.
But even the people who are legitimately house-shopping nonetheless probably aren’t terribly serious about it, some agents said.
"The buyers who go to open houses are three to nine months from buying," said James Gallagher, of Homesmax Homesellers in Concord, Calif. "Ready, willing and able buyers have agents. They make appointments with their agents to show them homes."
3. The Internet and other social media, the open-house skeptics said, are the things to focus on now, numerous agents commented.
"This isn’t the ’70s, ’80s or ’90s any more, when open houses were effective," said Mike Kennedy of Railey Realty in Deep Creek Lake, Md. "The Internet Age has drastically changed how a buyer searches for and purchases a home. Sellers need to know this upfront.
"Since nearly 90 percent of all buyers start their search on the Internet, my time is better spent working for them by increasing their marketing exposure on the Internet — not spending four hours at their house on a weekend talking with buyers who aren’t motivated," Kennedy said. …CONTINUED
4. Security — both personal and legal — is a concern when a homeowner invites the world through the door, they said.
"The possibility of theft or bodily harm is on the rise," said Nena Gavigan, an agent with Crye-Leike Realtors in Alpharetta, Ga. "Allowing strangers to enter someone else’s home also raises the liability issue, were something unforeseen to occur."
LaVeta Key, a Crye-Leike managing broker in Bentonville, Ark., agreed.
"The safety of an agent sitting an open house is limited, at best," she responded. "You have just targeted yourself as being alone in a home for any crazed individual with an agenda.
"And you have opened your clients’ home up for anyone to come in and case the home for a potential robbery," Key said. "This is the same reason I don’t think virtual tours are great tools."
5. Then there’s the issue of just who really benefits from an open house: the seller, or the agent who happens to meet and cultivate other clients? Many agents in this wholly unscientific study acknowledged that prospecting for other business is a frequent byproduct of opens — some of them saying it’s their primary reason for being there.
"Around here, agents hold public open houses primarily a) to pick up clients and b) to cheaply impress clients with how hard they’re working," said Dana Graham of Prudential California Realty in Palos Verdes, Calif.
Missy Stagers of Coldwell Banker D’Ann Harper Realtors in San Antonio, Texas, said she regards an open house as a way of pleasing sellers "who want to see you doing something. An agent’s real reason for doing one is to meet potential buyers and sellers in need of real estate services, now and in the future," she said.
Mary Umberger is a freelance writer in Chicago.
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