There are just two valid reasons for an agent to hold an open house and neither of them has much to do with selling the house being held open.
Reason 1: find stray (motivated) buyers (those that do not have an agent) and become their agent.
Reason 2: meet neighbors who will later want to sell their home.
Doing something time consuming one doesn’t want to do in order to “keep the seller happy” makes no sense.
One time many many years ago before I understood what I have written above I was holding an open house. I had lots of traffic and came to realize that virtually all of the people streaming through were not buyers but were neighbors, looking for decorating ideas and just liked seeing the inside of the other units in the complex. After seeing all of the rooms, as they were on their way out, they would realize they hadn’t even asked me the price – and as they were leaving would ask how much it was selling for. As any real buyer would have wanted to know the price sooner than later – after about 10 people through – I knew my day (yes, it was a Sunday) was a total waste, unless I could find a way to entertain myself. I choose the price. Just to see what would happen, I started quoting prices (in $10,000 increments) lower and lower to see if anyone would even blink. This was a $150,000 condo and I got the quoted price down below 100k. Each of the visitors just thanked me for my time and left.
There were several comments commenting on my comment (The BloodhoundBlog Method?) and I wanted to respond to those – and possibly clarify why I wrote what I did.
Am I aware that some agents are very skilled at actually selling the house being held open? Yes. In fact, Greg and Kris both commented that they have sold houses numerous times by holding them open. My good friend Dean Selvey (currently the number 1 Re/Max agent on earth), back when he did mostly REO properties for banks, would run ads on a Saturday announcing, “First Time Open Bank Owned Property – Open from Noon to 2 PM” and routinely (he did this 20 – 30 times) sell the house himself, with a contract written by him by around 2:30 PM. I believe we used to refer to this sort of thing as double dipping. (we didn’t discuss agency much back in those days:-)
Was I personally ever good at holding open houses or selling the house being held open? No, I was not. Further, I’ve always hated doing them. I understood that there was “something to it” and that some agents had that something and I knew I did not. I feel it is important to disclose these facts – for many years I have viewed open houses through the filter of “I don’t like them”. It is only honest to say this. In light of all this, do I still feel that there are only two valid reasons for holding an open house and that both of those reasons are fully covered by 1 & 2 in my comment above? Yes.
Early on in my career what mattered to me was THE DEAL. I was hungry and wanted that deal. It was simple, I needed the money. As my business changed from me having a seven day a week job (where I could worry about money all the time) into an actual business where I didn’t worry about it at all, I gradually changed too. I found that I no longer cared about “the deal” at all. Only the process. I understand that can seem odd but nevertheless, it is true. Now, getting or not getting any particular deal is not something I could fixate my attention on for very long without extreme boredom setting in. But the process of getting deals is so fascinating that I sometimes can’t sleep – I get so excited about some new idea or new program.
Some of the ideas for getting new customers I’ve looked at over the years did not get much more than a cursory glance. For example, meeting potential buyers and sellers while golfing. I’ve had people (who liked to play golf) explain to me what a great method this is for bonding with someone and ultimately getting their business. To me it seemed to be in the same category as someone sitting around all day in a bar drinking and thinking to themselves that they had gotten several buyers from being at that bar. That may be true, but I really doubt this is likely to survey well as a great system for contacting buyers and sellers. I don’t intend this as a straw man point. My point here is that any agent could do just about anything and wind up getting business from doing that thing. Just so long as they were willing to let people know that they were in the real estate business, they could attract people to talk to them about real estate. Unlike some products (life insurance, for example), most people find talking about the housing market interesting. I have never tested this but I have held the belief for over a decade that a Realtor who liked food shopping (and had a name badge, identifying themselves as a Realtor) could, in a few hours a day, just standing around the produce section in a high traffic grocery store, acquire all the business one person could physically handle. In short, whatever that agent does is “how” they get business.
If any agent wants buyers, THE lowest cost way I know of to acquire them is hold an open house. Especially a house that a maximum of two open house tent signs can get them to from a major street. Best days? Weekdays between 4 – 6:30. This method has been used quite successfully in most parts of the country. This is covered in # 1 above in my original comment.
If one has a geographic farm, or just wants to meet the neighbors or impress them with your marketing (who will at some point in time become sellers), hold an open house. It is a great way to accomplish # 2 above.
All of my scripts were developed to avoid holding open houses because I did not want to do them. I got pretty good at explaining why they were not necessary. (“With a virtual tour we are having an open house for you seven days a week, 24 hours a day.”) Was there a time when I lost listings because the seller had purchased their home from dropping into an open house? Sure. But I knew that if I had a salable listing I could always sell the house without having to ever bother holding it open. I am not suggesting that agents can’t sell a house by holding it open, I am saying that if they can sell it by holding it open they could sell it without holding it open. Am I trying to talk agents out of doing open houses? Not anymore than I would try to talk someone out of playing golf. If you think it is a fun game, totally cool with me if you like to get up early so you can get out there and whack that little ball around. I know some people are highly skilled at whacking the little ball and get a great deal of joy doing it. It just never was the game for me. But I do go for melons and bananas.6 comments