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The Truth About Open Houses

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The truth about open houses is that they are falling out of favor among top realtors. In a survey of 133 top producing agents done by homelight.com found that 63% of agents surveyed do not always recommend sellers host an open house. The same survey asked each agent to rate the effectiveness of open houses on a scale of 1 to 10 and found that only 2% of the agents rated open houses as “very effective”, and 52% gave open houses a rating of 4 or below.

What happened? For years the conventional wisdom stipulated that not hosting an open house was as bad as throwing money out the window, and yet top agents are using them less and less.

Top producing agents have this to say…

One top producing agent from Sacramento had this feedback to offer: “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.”

In the modern era the open house has become a situational tool dependent on certain factors to be effective. You should consider:

Is the home unique?

Is it close to busy, populated areas?

Is it in spotless condition?

Has the home been emptied of valuables?

Is there enough parking and access for several groups simultaneously?

Do you have an hour or two to prepare the home in advance?

If the answer is “yes” to the above questions, you should consider hosting an open house to display the character and benefits of the home. If the answer is “no” you may want to reconsider spending your Sunday hosting an open house.

Who benefits from an open house?
The second important question is who benefits from the open house? A top agent from Florida has this to say: “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 the open houses.” The
implication here is that the chances of finding a buyer at an open house are low, but the chances of drumming up more business for the agent is high.

Open houses as a lead generation model.

Using open houses as a lead generation model may work for some agents, but others have started to notice that open houses attract nosy neighbors,
unqualified buyers, investors with lowball offers, tire kickers, looky-loos, and very few people who are ready, willing, and able to buy.

Additionally, buyers who fall into the “ready, willing, and able” category often prefer a private showing on their own time to avoid the hustle and bustle of an open house. So, if open houses only really benefit the agent hosting them, why should a seller even consider one? For starters the open house sets a deadline to clean, market, and stage your property, which may be the biggest benefit to you as a seller. No, you probably won’t find a buyer at your open house, but having it staged, spotless, and ready to show is a benefit in itself.

Are open houses obsolete?
No, far from it, but they are no longer considered essential either. Whether
or not hosting an open house is the right strategy for your home is a conversation you will need to have with your agent.

 

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