Are Open House Visitors Legitimate Home Buyers?

By
Real Estate Broker/Owner with Franklin Homes Realty LLC

Are Open House Visitors Legitimate Home Buyers?I hosted an open house on Sunday. The weather was beautiful and the open house was in a good location to attract passers-by. We had ten couples who visited that day.

As the sellers returned home, I told them we had good traffic but not sure any were legitimate buyers. They suggested we have an open house every week because they are getting more buyers through the house in two hours than they do all week. Just because these people attended the open house doesn't mean they are actual buyers. 

Sellers often think that visitors attending an open house are interested in buying their house right now and have chosen to view it through an open house rather than contacting an agent. This is rarely the case. As a matter of fact, in the eight years I've been selling real estate, only one open house visitor actually purchased the home. He didn't do that until 30 days later.

The majority of the attendees may be interested in buying a home sometime in the future but may not have the ability to buy right now. Or this house may not even meet any of their criteria. This is exactly why I don't advise sellers have an open house. Many visitors may be six months or more away from buying. Case in point, here is what I learned upon contacting these supposed buyers:

  1. Three couples stopped in because they saw the sign--Looky-lous. They don't plan to buy at all.
  2. One couple lives in the neighborhood. They are listing their house soon and were measuring up the competition.
  3. Two other couples won't be in the market for two or more years.
  4. One couple is looking for a home priced less than $417K dollars. This home is priced at $499,900. 
  5. Two other couples are interested in buying within the next six months. They both own homes that aren't even on the market yet. They aren't interested in selling their homes before next Spring.
  6. One agent arrived with his client. We had spoken earlier in the day. He was out showing this couple several properties and added us to the list. 

The seller viewed these ten couples as ready, willing and able buyers. They were not. Unfortunately, the people who often come through an open house aren't necessarily in the market to buy right now or may not have the financial wherewithal to buy now.

When buyers are working with an agent, they are usually within three months or less of actually making a purchase. In most cases, the agents have already vetted the buyers. They know they have the ability to financially purchase the home they are viewing.  They also know the house meets some of the buyer's criteria. Open house visitors haven't been subjected to that scrutiny. It's very possible the attendees aren't even qualified to buy your home.

Interestingly, the only immediate buyer who visited the open house was brought there by his agent.

I try to explain to sellers there are better ways to get legitimate buyers to view their home. Targeted marketing directing buyers to features in the home will yield better results. They see so many agents offering open houses, they think there must be a benefit.

The truth is the real benefit is to these agents. While open houses don't usually present an immediate buyer for the house they are holding open, they can be a gold mine for future business. As was the case on Sunday. Five of the ten couples who came through the house are looking to buy sometime in the future. These buyers don't currently have an agent. Good follow-up with these buyers could lead to future sales.

If buyers aren't coming through your home during the week, it's more likely related to price or condition. Talk with your agent about the best way to get your home in front of buyers who are currently in the market. You'll be much happier with the results.

Are open house visitors legitimate home buyers? Maybe sometime in the future but probably not now.

Posted by
Tammie White, Managing Broker/Owner
CLHMS, CRS, GRI, SFR
Franklin Homes Realty LLC
Franklin, TN
(615) 495-0752 
GET REAL. GET LOCAL.
 
This posting with the content written here and photographs displayed are the intellectual property and opinions of Tammie White of Franklin Homes Realty LLC. Any party who uses this material without the written permission of Tammie White is subject to copyright infringement and possible lawsuit.
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Rainmaker
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Nina Hollander
Coldwell Banker Residential Brokerage - Charlotte, NC
Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor

Good morning, Tammie... this is precisely why I don't do open houses anymore. You don't need traffic to sell a home. You need the right traffic. I read statistics years ago that the average open house visitor was 6 months from buying a home. So maybe you get a prospect out of it, but your seller doesn't get their home sold.

Nov 11, 2015 09:44 PM #1
Rainmaker
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Joe Jackson
Keller Williams Capital Partners Realty - Columbus, OH
Clintonville and Central Ohio Real Estate Expert

Good morning Tammie, you're correct not all buyers who go through an open house are ready willingand able buyers. We do them to generate future Sellers in the neighborhood 

Nov 11, 2015 09:47 PM #2
Rainmaker
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Roger D. Mucci
Shaken...with a Twist 216.633.2092 - Euclid, OH
Lets shake things up at your home today!

And then we read that in some markets, an Open House is very succesful.  Once again I am forced to quote Michael Jacobs  ....I guess "it depends".

Nov 11, 2015 09:49 PM #3
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Patricia Kennedy
RLAH Real Estate - Washington, DC
Home in the Capital

Tammie, well planned and publicized Open Houses are probably the most effective to market a home.  In this area, I'm guessing that well over half of the homes sell to buyers who visited the Open House and then had their agent write up the offer.  And sometimes they looked like lookey loos.  It's hard to tell. 

Nov 11, 2015 10:15 PM #4
Rainmaker
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Brenda Mayette
Miranda Real Estate Group, Inc. - Glenville, NY
Getting results w/ knowledge & know-how!

Open houses can be a great way to add to your data base but that seems to be the primary reason for holding them as they rarely sell the property.  They can also pose a safety issue for the host agent and the sellers' belongings... That all being said, this girl has found better outcomes by spending a Sunday afternoon with serious & vetted buyers or my family.  Great topic Tammie & interesting to see the traffic/benefits of these events in different markets.

Nov 11, 2015 10:16 PM #5
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Tammie White, Broker
Franklin Homes Realty LLC - Franklin, TN
Franklin TN Homes for Sale

Nina - If I'd been looking for buyers, this would have been a great opportunity but that isn't going to help my client sell his home.

Joe - We see more buyers than sellers.

Roger - As I always say, "Real estate is local."

Patricia Kennedy  - The only time we see this happening in our market is if there's a hot property priced under $300K that has held off showings until the open house. Then a home might have 20 buyers through it and yield multiple offers. Otherwise, open houses aren't the best way to market a home here, even well-publicized ones.

Many listing agents refuse to offer them. I don't advise sellers to have one but if a seller persists, I will agree to host one to satisfy their curiosity. The result ends up being frustrated sellers. They think the visitors are legitimate buyers that we can convince to buy their home. That's not going to happen. Either buyers are interested or they're not, no coercion on my part is going to convince them to buy.

Brenda - There was good traffic but no legitimate buyer.

Nov 11, 2015 10:31 PM #6
Rainmaker
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Debbie Gartner
The Flooring Girl - White Plains, NY
The Flooring Girl & Blog Stylist -Dynamo Marketers

This is weird.  I could have sworn that I read and commented on this yesterday.  I so agree...most going to open houses are not ready nor qualified to buy yet.

Nov 11, 2015 10:33 PM #7
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Tammie White, Broker
Franklin Homes Realty LLC - Franklin, TN
Franklin TN Homes for Sale

Debbie Gartner - You did. For some reason that post re-verted back to a draft that wouldn't remain as a public post. I had to re-post it. You're not going crazy.

Nov 11, 2015 10:41 PM #8
Rainmaker
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Nicole Doty - Gilbert Real Estate Expert
Zion Realty - Gilbert, AZ
Broker/Owner of Zion Realty ZionRealtyAZ.com

At least here in my market most attendees of open houses are tire kickers or nosy neighbors. I can't even remember the last time I sold a home due to an open house. It's been years and years. 

Nov 12, 2015 01:20 AM #9
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Belinda Spillman
Aspen Lane Real Estate Colorful Colorado - Aurora, CO
Colorado Living!

Sellers seem to think that people through the house (regardless of who) is a good thing.  I think it is more important to get pre-qualified serious buyers in the home.  Have fun with this one.  Hopefully you and Tom aren't camped out every weekend.

Nov 12, 2015 01:50 AM #10
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Dick Greenberg
New Paradigm Partners LLC - Fort Collins, CO
Northern Colorado Residential Real Estate

Hi Tammie - Our open house success rate for actual sales mirrors yours, and we always explain to our sellers why we're willing to do them, but that it's most likely not going to lead to a sale of their home - most serious right-now buyers are doing their looking on-line and working with their agent.

Nov 12, 2015 01:52 AM #11
Rainmaker
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Ron and Alexandra Seigel
Napa Consultants - Carpinteria, CA
Luxury Real Estate Branding, Marketing & Strategy

Tammie,

I agree with you.  In our area, there are many open houses, and these work because these homes are often bought as a second home.  When we sold our home in Los Angeles, we insisted on no open houses, and no signs.  A

Nov 12, 2015 02:08 AM #12
Rainmaker
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Laura Allen, Lake Tahoe - Truckee Real Estate for Sale TahoeLauraRealEstate.com
Coldwell Banker, Tahoe City, CA (530) 414-1260 - Tahoe City, CA
Tahoe Real Estate Agent Helping Buyers and Sellers

Tammie White - Open house is an open invitation to view - nothing more. It's a marketing tool, one of many that agents have to promote a property.  It's important that sellers understand the purpose of open house and the advantages and disadvantages of having one in their local market.  Great post and information for sellers!  

Nov 12, 2015 03:05 AM #13
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Tammie White, Broker
Franklin Homes Realty LLC - Franklin, TN
Franklin TN Homes for Sale

Nicole - Any visitor is good if the agent is looking for future business. However, if they are looking to sell the listing, there are better ways to do it.

Belinda - My thoughts exactly.

Dick - I had an open house a couple of months ago on a house that had an awesome online presence. As a matter of fact, several visitors said they were so hoping we would have an open house so they could see it. Not one of the attendees wrote an offer on the property. That just goes to show, these people aren't serious buyers.

A - I love seller who insist on no open houses.

Laura - Some areas might have great success with an open house. The only time we see that here is if it's priced under $300K and it's the first day of showings.

Nov 12, 2015 07:08 AM #14
Rainmaker
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Ryan Huggins - Thousand Oaks, CA
https://HugginsHomes.com - Thousand Oaks, CA
Residential Real Estate and Investment Properties

Tammie, great post and especially the breakdown.  In some of my more productive (30+ people) open houses, I've found that the majority are "lookie loo" neighbors wanting to know what's happening on their block.  A handful are active buyers, but not serious as they don't want an agent.  Some are serious and are either there with their agent, or their agent called and registered them before the open house.

 

My favorite ones were: "We go open house shopping after church each week as a family outing." and "My agent is holding an open house at my house, so I have time to kill and thought 'what the heck, let's look at open houses'."  Feel free to use those examples anytime (that goes for anyone else too).

Nov 12, 2015 11:35 AM #15
Rainmaker
2,813,643
Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

I'm of the mind that anybody that's interested has the potential to buy just based on the fact of being interested.

Nov 25, 2015 03:54 PM #17
Rainmaker
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Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

I don't rule out that it's easier to get a commitment from somebody with a financial investment, having just said that.

Nov 25, 2015 03:56 PM #18
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