Open Houses May Be a Waste of Time
It’s a delightful Sunday afternoon. You would like nothing better than to sip coffee, stretch out with the Sunday paper and then putter in your garden. But you’re trying to sell your house, and your real estate agent has you scheduled for an open house.
Instead of spending a relaxing afternoon, you are hurriedly cleaning and stowing valuables. Shoes tossed in the closet must be neatly lined up. Jewelry and watches must be hidden. That pesky carpet spot must be scrubbed.
Worst of all, your agent makes it obvious that your presence during the open house wouldn’t be appreciated. You’ve got to clear out so the public can troop through.
All this would be tolerable if an open house offered the genuine prospect that your property will be sold. But realty experts say that the real winner at an open house is usually not the seller. Rather, it’s the seller’s agent, who uses the event to drum up new business.
“Open houses are a total waste of time for the seller,” asserted Carolyn Janik, a New Jersey-based real estate author who sold residential property for 10 years.
“Most people going around open houses are touring, getting decorating ideas or they’re curiosity seekers--looking at houses priced higher than they can afford. Some are thinking about selling their own homes and are checking into pricing in the neighborhood.”
Real estate experts say that only 1% to 5% of homes on the resale market sell through open houses. The odds are better that the realty agent will help himself find new business at an open house. According to a survey by the National Assn. of Realtors (NAR), 7% of those who buy homes met their agent at an open house.
Nevertheless, some realty experts contend that open houses offer indirect benefits to the seller, including exposure to people who may know someone who is a serious candidate to buy the home. The more people who see the place, the greater the chance they will have contact with someone who wants to buy it, they say.
For instance, a neighbor who visits an open house purely out of curiosity may happen to mention the place to a cousin who is moving to that city. Then, perhaps, the cousin sees the home with his agent and decides to buy.
“Sellers want to turn over every possible rock that could lead to a sale,” said Joseph Zick, a sales manager for the Century 21 chain. “There’s always the potential at an open house to pick up a valid buyer.”
“It’s the luck of the draw,” said George Green, a Phoenix-based NAR vice president. He said that although it is usually serendipity when a home sells through an open house, such an event can provide valuable feedback on the public’s reaction to the property.
A good deal can be learned by reading the body language of those visiting a house, Green said. People who don’t like a property will stand silently, cross their arms, give back a listing sheet, decline to cross the threshold or show other signs they don’t like the property, he said.
Although most visitors would consider it rude to make derogatory statements about a property during a visit, many will be quite explicit later when they talk about the place to their agents.
They will talk about how the dirty carpet was a turnoff, how the smell of a dog in the basement was objectionable and how the shrubbery appeared overgrown. They may talk about price and convey the sentiment that the house was at least $15,000 over market.
Such comments can provide worthwhile pointers regarding price adjustments and physical modifications that would ultimately help the place move. That could be especially valuable in a cool market, when few prospective buyers are coming through, and a frustrated seller is starved for feedback.
But realty experts such as Janik say the negatives outweigh the positives. Besides the inconvenience associated with an open house, she says, such an event can create a security risk, at least in some neighborhoods.
Occasionally, an open house leads to accidentally damaged property, such as a broken vase. It is hard for the agent who runs an open house to keep a close eye on all who tour the place, especially when several visitors come at once.
Furthermore, Janik says, many sellers feel their privacy is violated by having the public come through their homes, causing upheaval in their lives.
Selling a home does involve the sacrifice of some privacy. Inevitably, strangers must come through to see the place or it doesn’t sell. But those who tour a property by appointment are usually better bets as potential buyers. In most cases, they have been prequalified by their agents as financially capable of purchasing such a place.
Although Janik contends that most open houses are usually not worth the trouble, she said there are exceptions to the rule. New-home subdivisions traditionally are sold through builder open houses that may last for weeks or months.
Even in the resale market, she says, a special open house exclusively for realty agents can be extremely valuable. To the industry, such an event is known as a “brokers’ open.”
During a brokers’ open, the listing agent shows the property to a number of agents from various real estate agencies. Often, lunch or refreshments are served as an enticement to draw in a crowd. When the event is over, word of the property spreads through the real estate community, increasing the chance of a sale to a qualified buyer.
If the home you have for sale has not been shown through a brokers’ open house, it is smart to encourage your agent to conduct one and to advertise it thoroughly. The best time to hold such an event is on a day when many other such events are held, because agents see an economy of scale in visiting many properties the same day, Janik advised.
