Open House - yes or no?

Question

We just put our latest rehab on the market a couple of days ago (and it's a beauty, I must say!). I've had a few people ask whether we are having an open house, w/the implied assumption being that you always host an open house upon completion of a rehab.

I've always been under the impression that the open house does more to help the Realtor add to their contact list than to actually sell the house (btw, we are the listing agents here). The narrative, as I understand it, is that a Realtor will hold one usually because the homeowner wants one and is under the mistaken impression that it will attract serious buyers, when in reality you get curious neighbors and the competition.

What do you all say? Is an open house worth the time? I'm more than willing to do it if it is, not excited about it if it's not.

David T. · Answer

@Karin DiMauro, happy to oblige!

We start marketing the open house 30 days before when we have a confirmed date for the completion of the Rehab. Start with a sign or banner outside the house, usually listing all the participants and if we have an architect and engineer involved, we put their names up also. This looks cool!

Then craigslist, newspaper ads, website, street signs, in store displays, MLS, all the usual suspects. We also circulate leaflets to local residents asking them to invite anyone they'd like to see move into the area. Sometimes we will offer a $500 bounty if they bring us a successful buyer on the day. This last works best where the locale is community focused or well established.

Also, Saturday 10/11 a.m. to 4/5 p.m. is the time we set it up for. Saturdays have been proven to be better for this than Sundays, don't ask me why.

Finally, to acknowledge the Realtor comments above; Nearly every Agent will hate this stuff mostly because it means that rather than just list the product on the MLS and wait for their commission, they actually have to get up off their asses and do some real work and if they don't get this right, nobody shows up and they get found out.

Invite everyone, treat it like a clap on the back for yourself and your crew for a job well done and heaven forbid, you might even enjoy yourselves! If you get an offer come Monday, you're ready to kill your next deal.

Best of luck with it.

Matthew Baumberger · Answer

I personally think an open house couldn't hurt. It's just another tool. Good luck!

Darren Sager · Answer

If you're listing the house for sale with a realtor its important that you do a broker's open house so that all the realtors can come through.  As for a "public" open house I believe the latest numbers show it amounts to less than 1% of houses are actually sold that way.  So, why put so much effort into something if its only going to have less than a 1% chance of actually doing what you want it to.  Primarily its still done because some people still believe that houses are sold that way.  And yes as @Patrick Connell they can be a great way for realtors to find other potential clients.  Any realtor or real estate company that touts the benefits of public open houses in my opinion still reads newspapers and uses a fax machine.  That may work in more rural areas like where @Brandon Turner lives.  However in the top 25 US markets I would say you're better off focusing your efforts in making sure you're priced as the best value for the dollar.

Patrick Connell · Answer

Personal opinion only, but open houses are a sales tactic left over from long ago when the internet didn't exist as it does today.

Today, it's simply a way to increase contacts and find more buyers; which I'm totally not against but doesn't do a thing to sell the home. A large majority of home buyers today start their search on the internet and narrow down choices based on pictures and a written description. Have someone take great pictures, write a great description, and post it to the local MLS and Postlets.

Steve Babiak · Answer

One thing people miss about open houses, is that those neighbors visiting might actually have friends and family who are looking to move to that area. If the neighbor likes it, they will likely tell that friend or family member ...

David T. · Answer

For us an open house is an opportunity to do some PR as well as a marketing opportunity. It really does come down to how you market it. Where we have aggressively marketed a post rehab open house with a $1k plus budget, we've had same day multiple offers.

As far as the competition goes, they will look at your property anyway, so that's not an issue.

If the property is really nice, it might be worth it. You can advertise to buy property during the process and may even pick up a local deal. Always worth a shot for a nicely finished home, in my view.

Good luck with it!

Karin Crompton · Answer

Thanks everyone, you've given me some really good ideas to chew on. Interestingly, my stager said no food! She said bottles of water at most. I think it had to do with not making a mess; she's also a fan of people taking their shoes off, and she rarely even puts out toilet paper (I don't mean to steer this toward a staging discussion, but she wants to discourage folks from using the bathroom and, again, creating a mess I'd have to deal with. And, as I'm fresh off a stopped-up toilet in another house we currently have listed, I'm leaning toward that philosophy. She puts out folded white towels to give it a spa feel, a pop of color with (fake) flowers in a vase, a big beautiful bar of soap to act as a diffuser and add to the spa feel, etc. So the No-Food rule comes from that kind of approach.).

But I digress. I do like the flyers to neighbors and the pre-listing ramp-up and will keep that in mind for the next one we do. I imagine you wind up with some people who want to see the house early. What do you do w/them if the house still has contractor litter and is half torn apart, that kind of thing?

And I do have to disagree a bit with the lazy Realtor part. Although there are admittedly plenty of lazy ones out there, I think a majority simply don't have $1,000 to devote to marketing, not to mention the time. A large-scale marketing effort like that is labor intensive, and if they have a decent number of listings, I imagine it would be next to impossible to do that kind of thing for even half of them. That's not to say it isn't a good idea, just a tough one for a busy agent to pull off.

Patrick Connell · Answer

I agree with @Darren Sager in regards to a BROKERS open house; these will expand your potential sales leads significantly vs. a public open house. If you do this, candles, nice music, and FOOD!

@David  T.  does make a good point about making it more like a celebration than an open house, plus it'll make your contractors feel good about it; again, everyone loves food LOL.

However, I have to disagree with David in regards to his statement about agents. I love open houses, they bring me more clients and make the homeowner feel like we're being more proactive with the sale; despite the fact that I let them know up front that the numbers show they don't work. Homes today are sold primarily with a strong online presence, great photography, and a strong network. Additionally, the best thing an agent can do for a client is get the home ready to sell; i.e. help the owner depersonalize the home, fix things that turn potential buyers off, arrange rooms so they're not crowded and feel open, etc.

But, there are some very lazy agents out there so I agree in part with the statement.

Account Closed · Answer

There's a lot of factors that impact it, one of which is your local community.

In some areas open houses work, in some they aren't that popular. The marketing associated with it has a huge impact like David mentioned. My mentor agent friend had an open house last week-end for another agent so I visited it. We chatted for an hour and a half before anyone showed up, and the lady that showed up was the neighbor.

What's crazy is that due to some clerical error with the newspaper, the open house was listed twice that week-end. You can see how much of an impact that kind of advertising has (not)!

I personally haven't done a lot of open houses so I don't have data to support it but all the agents I talk to mention that door knocking in the neighborhood and dropping off flyers still has a big impact on turnout. The angle being that the community gets to choose their new neighbor, and if they know someone who wants to move into that neighborhood it's a good time to come check it out.

Open House - yes or no?

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