One of the most controversial topics in the real estate industry are open houses. Like with anything, there are PROs and CONs to open houses.
As a home seller, your real estate agent should be doing everything to put your interests first. So the question I present to every home seller is, "do open houses put your interests first?"
At first glance, many home sellers believe that an agent hosting an open house is putting their interests first. This is understandable because many agents will convince a seller that the reason their home is going to sell is because they're going to host an open house every weekend.
Believing that an open house is necessary to sell a home is actually one of the most common open house myths.
Before deciding that opening your home up to every Tom, Dick, and Harry next weekend, let's discuss why an agent hosting an open house is NOT putting their clients best interests first!
1.) Chances Of A Home Selling Because Of An Open House Are As Good As Seeing Sasquatch
Obviously a huge percentage of homes sell as a direct result of open houses, right? Actually it's quite the opposite.
The percentage of homes that sell as a direct result of an open house has been reported to be less than 10%. According to the NAR, 8% of homes sold as a result of a yard sign/open house.
Now let's even say for conversation sake, 3% sold as a result of a buyer driving by a home and calling the agent on the sign, that leaves a mere 5% selling because of an open house.
If I were a gambling man, putting my money on a game that only had a 5% chance of winning would not be the game I'd choose to play!
A home selling as a direct result of an open house is very rare. Those home sellers who wait for their agent to call them Sunday night with dozens of purchase offers are often disappointed when that phone call doesn't happen.
2.) Real Estate Agents "Forget" To Discuss Who Really Benefits Most From Open Houses
Wait a minute...Home sellers benefit most from open houses! Nope, the majority of the time this is not the case.
Fellow agents, before rapid firing away on your keyboard in the comments below about how you picked up some great buyer or seller prospects from an open house, please understand that I have no issue with using an open house as a method of prospecting. In fact, for newer agents, using open houses as a prospecting method is a good idea.
The issue is that the majority of real estate professionals neglect to explain to a seller that the person who benefits the most from an open house is themselves and potentially their pocketbook.
Fellow agents, again, before rapid firing away on your keyboard in the comments below about how you hosted an open house that resulted in you getting both sides of a transaction, remember we're discussing whether an open house really puts a sellers interests first.
Depending on the state you're located in will determine whether dual agency is allowed or not. Dual agency does not protect a home sellers best interests. Therefore because an open house resulted in getting both sides of a transaction, it's pretty clear who benefited most from the open house, the agent.
If agents discuss all of the PROs and CONs of open houses and the seller still believes that their interests are first in line, by all means, host away! The likelihood that a home seller who understands all of the PROs and CONs of open houses still wants open houses is very low.
3.) Would The Number Of Homes Sold Change If Open Houses Didn't Exist?
This question can be easily answered, but that's not any fun! The number of homes sold would NOT change if open houses didn't exist.
But how is that possible?
It's actually pretty simple, if open houses were banned, serious and qualified buyers would setup private appointments to view a home they were interested in. There are total of 168 hours in a week, so there's a strong probability that a serious buyer will have a half hour throughout their week to go view a property they're interested in.
Nothing is more deflating to a seller who decides they want to have open houses only to find out afterwards that the only people who attended the open house were their nosy neighbors. Even worse is when their agent follows up with the attendees of the open house and finds out that the open house visitors can't get approved for a mortgage!
Bottom line, hosting open houses does not put a sellers interests first. Working as a real estate agent in Pittsford NY for almost 7 years, the number of open houses that I've held can be counted on two hands.
Why? Not because I'm a lazy agent, but because I make it a point to discuss open houses with my clients. After explaining all of the PROs and CONs associated with open houses and explaining to home sellers how I'll be marketing their home in other ways to get them top dollar, there is no question that they DO NOT want open houses.
Other Relating Open House Resources
- The False Hope Of An Open House via Planet InfoWars
- Why Do Real Estate Agents Hold Open Houses via Behance