Is an Open House Still a Must When Selling Your Home?
Despite all the changes technology has made in how houses are bought and sold, one standard feature of the process remains: the Sunday open house.
Shortly after a house goes on the market, the listing agent will set aside a Sunday afternoon to welcome prospective buyers (plus nosy neighbors) to see the house at its best.
%VIRTUAL-pullquote-It's very, very important you have open houses, especially the first few weeks when [the home is] on the market.%But has the open house gone the way of the landline and outlived its usefulness? It depends whom you ask. Some agents believe modern life has rendered open houses unnecessary, while others believe they are more important than ever.
"It's very, very important you have open houses, especially the first few weeks when [the home is] on the market," says Steven Aaron, head of the Steven Aaron Realtor Group at Keller Williams Beverly Hills. "It makes it convenient for the buyers to come and see the house without an appointment."
Craig McClelland, COO of Better Homes and Gardens Real Estate Metro Brokers in Atlanta, agrees about the importance of open houses.
"I think it's a great way to expose the house to people who are driving around," McClelland says. "People want that instant gratification. ... People want to see it now."
But some agents say that, far from finding open houses convenient, today's buyers want to see homes on their own schedule. Kevin Kudrna, a team leader and broker for Redfin in Colorado Springs, Colorado, says he tells his sellers that the chance of selling a home to someone who attends an open house is so small that it's not worth the trouble.
"In 2015, an open house isn't what it used to be," Kudrna says. More than 90 percent of buyers start their searches online, according to the 2014 National Association of Realtors' Profile of Home Buyers and Sellers, and the photos and videos let them rule out many homes without having to visit. "When the Internet started to bring all the listings online, people didn't have as much of a need to go into the houses."
Kudrna does admit there is an advantage to open houses. "When someone is looking into the neighborhood, it's right there in front of them," he says. But, he adds, "There are so few [open houses] it doesn't provide much opportunity."
There are no reliable statistics on how many home sales occur because of open houses. The 2014 NAR Profile of Home Buyers and Sellers found that 9 percent of buyers found the home they purchased from a yard sign or open house, down from 15 percent in 2001. But the data didn't split out yard sign from open houses.
McClelland's brokerage finds open houses so important that the company organizes a monthly Super Sunday and heavily promotes all the open houses via advertising and social media, even having a drawing for $1,000 for one lucky visitor. The firm also developed an in-house training course on doing an effective open house.
"It's really evolved over the past seven to 10 years," McClelland says. A decade ago, visitors had questions about neighborhoods and schools. Most buyers today have answered those questions with Internet research and are ready to see specific homes.
"Now they come in much further down that sales cycle where they're more ready to draw up a contract," Craig says. "They already know everything about the neighborhood."
But Kudrna sees more open house visitors from early in the sales cycle -- people who are looking for homes but haven't narrowed down their options enough to be ready to buy.
"All of the open houses I do, the majority of the people are neighbors," Kudrna says. Not everyone sees that as a negative, since neighbors may share details about the home with friends and family looking to buy or become clients of the agent later -- though that may not help the current sellers. Critics of open houses have long argued that the true beneficiary of an open house is the real estate agent, who can meet new clients.
Kudrna deals with a lot of buyers who are relocating and searching from afar. For those clients, he does personal tours via FaceTime or Skype. Even for local buyers, the photos and virtual tours provided with many listings may take the place of Sunday drives through neighborhoods, he believes.
Redfin lets clients book home tours on its website without making a phone call, though the agent will call back to confirm. "People are wanting that instant access," he says.
"In Denver and a lot of the markets now, houses are going into contract sometimes within hours," Kudrna says. "People want to be able to get into the house now, not to wait for an open house."
Local custom may also help determine the usefulness of an open house, especially in the sellers' market that is in effect throughout much of the country. In parts of California, for example, agents who are expecting multiple offers on a home may schedule an open house and not make appointments or accept offers until after that date.
"You end up with multiple offers in two weeks," Aaron says. "You have to have the open house to get the people in there."
Even agents who see value in open houses don't believe they're a good fit for all homes. Most agents require lookers to be prequalified before they can see higher-end homes or homes owned by celebrities. Some condos or co-ops ban or set strict limits on open houses.
Keeping the home secure during the open house isn't all that difficult, agents say. "It's not that hard to control it and control what's going on," McClelland says. Valuables should be put away, and Aaron advises his clients to secure prescription medications, money, jewelry and blank checks, not just stash them in a drawer.
For open houses to be effective, they also have to be sufficiently advertised, both online and with yard signs at major intersections as well as in front of the house, so people can follow the signs in from the main road. The home should also to be well-staged, with both the owners and their personal photos out of sight so the prospective buyers can envision themselves living there.
"You want to allow them to dream while they're in the house," McClelland says. "It's all about buying a dream."