This is a perennial and evergreen question that comes to me often working in real estate with Sellers. In this article, we will explore the truth behind this and rest the answer to one of the biggest myths that Open House helps sell a home.
Let’s take a deep dive into details and point out why this is a myth and why Open Houses very rarely sell a home.
1) Prospects Are Not Qualified – The people who are dropping by in your Open House are not qualified; these are often people driving around the neighborhood and stopping to checkout on the home. They sure might be a prospect, however, with a different price segment and property features. If a person who has a budget of $500,000 stops by in your property at an Open House with a listing price of $600,000, it won’t cut. Or a family looking specifically for a 4-bedroom home drops by to see your Open House, which a 3 bedroom home, or someone looking for 2 washrooms at upper level dropping in your property where there is one washroom at the upper level, etc. More often than not, the prospects who drop in the Open House are not serious ones; they want to just see what is there on the market and not genuinely interested buyers. The closest equivalent you can make is “window shopping”.
2) Helping Competition – In fact by conducting Open House, you might be helping your competition, in the form of another seller down the road. As its a free invite to see what your house offers based on its price, they might take the opportunity to drop-in. If your house looks decent for the price, and their home in not that great condition, they now might reduce the amount to generate traction in their selling and look more appealing to qualified buyers. On the other hand, these other sellers in the neighborhood would have never scheduled a showing for your home and come for a visit, it’s improbable. However, if you host an Open House, the chances are they will be there to take away learnings from your value/price proposition and adjust their strategy.
3) Curious Neighbors – This is another category of visitors who would mostly show up at the Open House. Even the distant neighbors who have never even spoken to you during your stay, might come to take a peek and look at how your house looks from inside and how the floor plan is. They have no intention to buy; they just want to ‘look’, ‘compare to their own home’ and ‘be aware’.
4) Security Risk – Conducting Open House is a security risk for you as sellers as in the case where two or more parties come in the Open House, it becomes practically impossible for your agent to shadow them during the tour, which increases the risk of theft of valuables, artifacts, etc. Even if you decide to schedule an Open House, always make sure to lock your valuables, documents, etc. in preparation.
5) Prospecting Tool for Agents – Open House, on the contrary, is a prospecting pillar surely for the agents to meet Seller and Buyer prospects for their future sale and purchases. The whole process of conducting an Open House has very little to do with the property in question. You will see that most top-producing agents will not emphasize on Open Houses as much based on the above facts and selling statistics. A great agent knows the Open House doesn’t work, and he or she will not utilize that opportunity just for their prospecting.
As a Seller, what am I losing if I don’t do an Open House?
The short answer is “Nothing“. There is very little to no requirement of an Open House in the Home Selling Process based on my field experience of all these years and as a top-producing agent in my office. After having done innumerable Open Houses myself over the years, this is the learning based on the facts and data collected over the years. The houses we list mostly are sold by scheduled viewings by brokers working with their pre-qualified buyer clients.
The proper exposure to MLS with professional photos/media, vivid description leading to scheduled showings that are booked for your property is the key and will eventually help in selling your property. Instead of Open House, you should spend your time and energy to keep the house in the best of the state inside and out, shining and with a pleasant odor for showing to qualified buyers in their scheduled viewing slots.
Firstly, when a Buyer Agent is working with a Buyer, and they schedule a time slot to view your property, this tells you that these people have the budget to buy your property as they have vetted the price.
Secondly, you can be assured that they are looking at homes with similar specifications as your property. They know # of bedrooms, washrooms, basement conditions, lot size, age, property tax, street outlook, neighborhood, etc. in advance, and still, they are taking time out of their schedule to come and view your property.
Thirdly, an agent also is taking time out to assist these prospects, which is another organic filter for us as a Seller to qualify the prospect and ensuring their buying capacity and intentions. A buying agent will not show a client with a borrowing qualification of $500,000, your home, which got listed at $600,000, so we have a right and legitimate screening of buyers.
Next time when you meet up with a listing agent who is boasting on the Open Houses, etc., you know right off the bat that it might be a good idea to interview some more agents. A great agent will not invest time in scheduling Open Houses, as it is not really helping the Sellers.
A great listing agent would instead spend time in the following:
1) providing consultancy on the house to get best staged for appearances
2) consultancy on how to increase the appeal of the property with minimal investment,
3) consultancy on how to prepare the house for increasing the probability of a prospect liking your home as soon as they enter
4) Will get good quality photoshoots done,
5) develop an appealing description for marketing the property
6) bring their experience to the table in the right pricing of the property and adopting a suitable pricing strategy to go with the current market condition
7) Utilize various social media avenues to give proper exposure to the house for millennials who are going digital
8) looking at utilizing local print media and circulation to provide exposure
9) using their circle of influence database to market your property
10) does an outstanding job in creating virtual tours which are appealing and catch the attention of buyer prospects and they reach out to their brokers for scheduling a viewing of your home
11) keeping you informed on the process and updates on getting your home listed and traction/inquiries received from showing agents to tailor the marketing strategy, with excellent communication skills
12) communicating and negotiating with the buyer brokers who come forward and bring an offer for best amount and other transaction terms
So, with above hope, it is evident to you as a Seller how and what sells a home, and Open Houses are not the ones who will help in achieving your goal. If you have any questions in Real Estate in the Greater Toronto Area, please reach out to our team, and we will be happy to assist.
Team Ravi & Mudit
#1 Team of RE/MAX Gold – RE/MAX Titan Team Award (2019)