Is the open house for your sale, or your Realtor?

Synonymous with the process of selling your home is the well-known, crucial event called the open house. Since before you were young the listing agent has been opening the doors of their listings and allowing literally anyone to walk through the home. This is a buyers opportunity to look around and take a peek beyond the curb appeal at what was being offered for sale, guilt free. But how did this event come to be and who is really benefitting from it? Is it disguised as something for the seller while ultimately only paying off for the Realtor? To properly understand we need to go back quite a while to see why these strange weekly events took place to begin with.

Rewind the clocks all the way back to the early 1900’s and you will find that buying and selling real estate looked a lot different than it does today. There was no formal real estate industry and anyone looking to sell their home simply just stuck a for-sale sign in the ground and did what they could to generate interest in the property. Realtors were not a thing, so sellers and buyers acted on their own behalf. Open houses came along as an opportunity where the seller could entertain multiple appointments at the same time. Simple as that.
Fast forward to the 1940’s/1950’s and the Post WWII housing boom. By this time a formal real estate industry had taken shape and agent representation was a common practice. Realtors were bringing in fancy furniture to their listings and using open houses to draw more attention to those listings in an attempt to sell them for higher prices. Sunday became the most common day to host an open house as the then current ‘blue laws’ or ‘Sunday laws’ that were in effect prevented business deals from taking place on Sundays. This meant that an open house could be held but the home could not be sold, making it a great time to generate interest and demand in the property.

75 years later, the concept of the open house has remained relatively the same. They typically take place on Sunday afternoons and are advertised as a way to generate interest in the sale of your home. As a Realtor, when I list a home for sale one of the first questions my clients ask me is: “When are you going to schedule the open house?” it’s a no-brainer to them that we are going to have one, it’s expected. Honestly, I’m climbing on the fence about whether or not the time and energy is worth the while for the client.
Has the evolution of the buying process changed this once staple event into nothing more than a lead magnet for your Realtor to pick up more business? Or does it still generate potential interest in the home?

WHO GOES TO THE OPEN HOUSE?

The answer is: everyone. The neighbors, potential buyers and often times the sellers themselves are lurking and snooping around the home. When you post your home for sale, the sign in the front yard is often enough to get the attention of the entire street. Then you post an extra sign advertising an open house which invites everyone to come and look around, you better believe that all the neighbors are going to come knocking.
The real question is, do real in-market buyers go to the open house? The answer is, sometimes but not usually.

The lions share of in-market buyers have a Realtor working for them, searching for properties, researching and booking showings. Ask ten people and nine of them will agree that a private showing is more effective in determining if they’re going to offer on a home than a busy open house being hosted by an agent you don’t know, who is working in the best interest of the seller. During a private showing you have the freedom to look at all the spaces in the home with none of the worry of being watched. You can also speak freely to your Realtor about any concerns you may have. During an open house you don’t have these luxuries.

Most times when a buyer does show up at an open house they are just beginning their search for their next home. Typically, they don’t know what they’re looking for, they haven’t locked down their financing and they often don’t have a Realtor. This is where the lure of the open house comes into play for the listing agent.
Now, of course if someone comes into the open house with genuine interest in the home your Realtor is going to do everything possible to put a deal together, we are sales people after all, but this is rare. Most of the actual buyers that come in don’t end up buying the home, in my experience they’re dreaming, typically looking at homes listed over what they can actually afford. So, if the majority of the people coming to the open house aren’t going to buy it, why host it all? Why put the seller through the stress of letting everyone in?

Well, there is that one-in-a-million chance that someone who does want to make an offer actually comes in, but mostly, it’s the best way for your Realtor to increase their business and generate leads. Think about it, the agents face is on the sign in the front yard, as mentioned earlier, buyers who don’t have a Realtor typically start by going to check out open houses. Your agent wants to have them come into your home so they can charm them, start that relationship and lock them down as clients, if they purchase your home, that’s a bonus, but if they want something different, that’s fine too.

Now, if you’re a seller your question may have shifted to “Should I let my Realtor host an open house?” and my answer is simply, yes.

I have sold several homes myself where the buyer was met at the open house, it does happen, just not very often. For that reason alone, it’s worth it to have one. You never know who is going to come through. There is also the power of word of mouth. People know people and while those that attend the home may not buy it, perhaps they know someone who will? The whole idea of listing your home for sale is to generate interest and it’s purely a numbers game. The more people through, the faster it will sell. Don’t get turned off by your Realtor trying to secure new clients from the open house. We’re still trying to sell your home as priority one, and if someone comes in and wants to do that we’ll get it done, but we can’t stay in business selling just your home alone, we need to cultivate leads and fill a pipeline of business to keep our families fed and your marketing live on social media.

In the end I think the risk on the sellers part is next to nothing, sure you will go to bed that night knowing that your nosy neighbors were standing in your bedroom earlier that day, but apart from that you are going to increase exposure and interest in your home, and that’s a good thing for your sale. If your Realtor picks up a few leads from it, that just means they’re personable and good at their job. Afterall, they landed you as a client at some point, right?

So is the open house for your sale or your Realtor? The answer is, both and that’s the way you should want it. .