Open houses often spark debate among real estate experts.
In one camp are the agents and home sellers who trust that an open house will help sell a property. The idea is that displaying the product for sale in an optimal light — staging helps — this generates interest and buzz which this leads to a sale.
On the other side are the agents and home sellers who consider an open house a waste of time and a marketing tactic that only serves to bolster the client list of the listing real estate agent. This camp points to statistics that state only 2% of open houses end with an offer.
While this might be true, these statistics miss an extremely important and vital point: An open house isn't meant to sell a property. An open house is meant to market the property. And marketing a property requires more than an ad and a prayer. It requires strategy.
Truth is if you don’t know how to sell a home an open house will not magically bring in offers. However, if you know how to use an open house as a marketing tool, you can leverage this event to get more offers and better results.
But to use an open house effectively, you need to go beyond fresh cookies and yard signs. Consider, instead, these three steps that can help you use an open house to accomplish the job: Getting an offer on the property for sale.
Step one: generate traffic
Before the Internet, there weren't many methods of sharing information about a home for sale. Newspaper and magazine ads would advertise properties and flyers would be delivered to those in the neighbourhood. Then came the Internet and everything changed. Now there is an online, user-friendly way to see all homes for sale using the Multiple Listing Service (the national database of all properties for sale, excluding For Sale By Owner properties that haven't gone through a real estate brokerage). There are also tech-savvy brokerages and agents who set up excellent email lists and websites that give anyone access to properties for sale.
As a result, more than 90% of home buyers now start their home search online, according to the National Association of Realtors. But going through picture after picture after picture of a home isn't the same thing as actually seeing a home. Walking through a property is still essential for the vast majority of home buyers. This means that buyers are still very keen to get inside a property and take a peak — and this makes an open house a very practical and important marketing tool.
The difference is rather than relying on flyers and newspaper ads to get the word out, you can now upload the open house details to the MLS service or your own agent or brokerage website and this information is available to anyone even remotely interested in the property or area.
So, the key to making sure your open house is a good marketing tool, remember to use the tools you have at your disposal in an optimal way:
- Post the date and time of your open house well in advance through your social media accounts and your Realtor’s social media accounts and online blog.
- Include professionally photographed shots of your home with the open house details (this will help gain more attention and traction).
- Post the open house details through the MLS listing well before the open house. Ideally, you want this information up and out to the general public at least 7 days before the date of the open house.
- Use traditional marketing, such as signage and flyers, to help potential buyers to locate the home, particularly in confusing neighbourhoods. Just don’t fret too much about the quality of signs as they don’t provide the return on investment they used to. Remember only one out of 10 buyers find the home through a physical sign.
- Consider using non-traditional open-house methods such as a public viewing using Skype, Google Hangouts or Facetime. Promoting a virtual tour will provide opportunities for those who are out of town to see the property.
It’s important to remember that traffic at an open house doesn’t have to mean physical feet through the door. Your real intent is to generate interest as this is the first step towards getting an offer from a potential buyer.
Step two: take action
How do you encourage interest during an open house? Start by asking people who come to the open house what they thought of the home. Most people are happy to offer their opinion and this can give you insight into what people are seeing (and whether or not you need to develop strategies for overcoming potential obstacles).
Once you've broken the ice, don't forget to ask the direct question: Are you thinking of making an offer?
If a person appears uncomfortable with this direct question, simply explain that you’re not here to pressure but rather you're trying to understand the strengths of the home and whether or not these are powerful enough to prompt action and a sale. Don’t ask them for the weaknesses of the home. First, you do not want potential buyers to focus on any negatives. Second, if the buyer really has an obstacle they'll mention it at this time, anyway. The real reason for these questions is to engage the potential buyer — if a person is engaged, they are that much closer to taking an action, and that's your role when listing a home for sale: Getting people to act.
Another way to prompt an action from open house viewers is to offer promotional material as a takeaway. This is a time when you want to focus on visuals and easy-to-read data. So, skip the neighbourhood data reports and stick with a single sheet covered in professional photography, with all of the relevant property details is perfect. Finally, make sure your takeaway has a call to action, such "make an offer before it's gone." Marketing materials will not drive buyers unless they specify which action you want them to take. The end result is that a buyer will have a memento of their visit and this memento should be visual enough to prompt discussion — and the more a prospective buyer is engaged, the greater the chance for action.
Step three: follow up
Converting your buyers at the open house is the best possible outcome but, statistically speaking, it rarely happens. That is why it’s critical for you to follow-up with the potential buyers afterwards. Of course, in order to contact them, you’ll need to have their information. Leave a sign-up sheet at your open house where they can share their email address or, preferably, their phone number.
Marketers have long known the value of segmenting audiences, and this same strategy can be applied to the contact list you generate at your open house. Ask your guests to indicate if they are interested in the home, interested in the neighbourhood or just curious. From there, you can prioritize or target your follow-up communication. For example, if you have a sizable turn-out at your open house you’ll probably only have time to get back to those who indicated interest in the house itself. On the other hand, if someone expressed interest in the neighbourhood as a whole, you can then send them a neighbourhood report along with information on the home to help their decision. The secret to getting that email open in the first place is to offer information you know they’ll value — such as up-to-date details and statistics of what is selling in this neighbourhood.
Finally, should you follow-up with those visitors who were just curious neighbours? Yes. Anyone who took the time to visit an open house is a potential client. If you don't have time for a personal call immediately after the open house, consider emailing the viewer. You could include the listing that's for sale and ask if they know any family or friends that may be interested in the property. Or, take a more personal approach and ask for their honest feedback on the property. Both strategies can result in action — and that's the real aim of an open house.
Ultimately, an open house is not a cure-all that will do the work of marketing a home for you. However, with a solid marketing strategy and variety of promotional avenues, it can be a very valuable tool to get the best possible offer for your selling client from a very excited buyer (or two).