Open Houses have a long tradition in real estate sales. They are a great chance for anyone interested in perhaps buying your home to have a look at it without having to make any phone calls or other arrangements. Every Sunday in every Canadian city, town and village you will find a Open Houses being held. But how useful are they in selling houses?
For the Realtor
For the Realtor, Open Houses are great. A broker once told me that for every ten Open Houses I do, I will get one sale. Sales is a numbers game and Open Houses are the only time that potential clients come to me. So a couple of years ago I tried out that broker’s statistic and aimed at doing 72 open houses that year. That meant every Sunday and every other Saturday (6 per month x12 months =72).
Let’s break it down: If you get 4 groups of potential buyers (including neighbors) through an Open House, you should consider that a success. That means 40 shoppers in 10 Open Houses. Perhaps 50% of them are actually at some stage of being “in the market”. That’s 20 left. Of those, 10 either are already working with a Realtor, are in the “just looking” stage or disqualify themselves for some other reason. That leaves 10. Of those 10, a good realtor can connect with 5. 1 of those 5 will actually lead to a sale. That’s the number’s game. If one sale is worth $5000 and you can do 7 leading from Open Houses per year it means you can make $35,000/year just from working Open House on weekends (and following up during the week).
Note: For the record I didn’t do 72 Open Houses that year. I lost track – I’d guess about 50, which generated 4 sales. Not too shabby and close to what the broker told me.
Another benefit for the Realtor is that holding Open Houses show the home seller that the Realtor is working on his behalf. Open Houses demonstrate that the Realtor is doing something besides waiting for the phone to ring and an appointment to be made.
Open Houses give a Realtor a good reason to advertise in the newspaper. There is a strong call to action after all (visit this Open House) and not just a Realtor promoting himself and his professional service (like in glossy magazines).
Finally, Open Houses often provide information about the neighborhood to the Realtor. It is amazing how much we can learn by talking to neighbors and asking the right questions.
For the Home Buyer
For the home buyer, Open Houses are often a squandered opportunity. They should visit open houses that fall within their price range or use the opportunity to glean information about neighborhoods, schools and local developments.
Home buyers should know that they are not going to find and buy their dream home by visiting Open Houses. Before I get an email from someone about that comment, let me just say it could happen, but almost never does. It’s never happened to me.
Home buyers should really be interviewing Realtors and learning everything they can about buying a home, as well as about neighborhoods, schools, taxes, developments, and what’s happening in the local market. What happens on TV is just drama. Real life real estate is no where near as dramatic. Many home buyers are afraid of salespeople (Realtors included) and avoid them instead of engaging them (and pumping them for information).
It’s typical that the first Open House will generate a lot of traffic – much of it curious neighbours. But that’s okay, sometimes neighbours are great word-of-mouth marketers for a great home.
Your Realtor will do two or three Open Houses, more if the home still generating good traffic, then take a break for a week or two and then start the cycle again.
Sunday’s are, without a doubt, the best day to do Open Houses. Saturdays can be good too. The public have come to expect certain things done in a certain way and when we get creative with our times, home buyers get confused or worse, suspicious.
The home buyer who buys buys your home may come through your Open House. If he likes what he sees, he will book an appointment with his realtor to come through again. That happens. Open Houses can lead to the sale of your house, though usually indirectly.
Finally, for the home seller Open Houses provide feedback from the general public.