Do Open Houses Work?
Depending upon who you ask, the traditional weekend open house is one of the biggest real estate hoaxes ever perpetrated on the real estate consumer or a tried-and-true marketing method.
In reality, open houses rarely contribute to the sale of a home and there is both anecdotal and statistical proof of that. On the other hand, in a slow market, even a small percentage of a boost in potential buyers is welcome.
Despite the aforementioned statistical proof that open houses don’t work to sell homes, the tradition continues. So, why do so many real estate agents still hold them? The cynical naysayers will caution you to ask yourself 'Who stands to benefit?' Of course they are referring to the listing agent, and they will tell you that the agent is merely trying to look busy for the client.
Then, there is the very real fact that many of the people traipsing through open houses aren’t even in the market to buy a house.
The New York Times recently interviewed folks touring some open houses in New York City. “We’re out dreaming today,” one attendee claimed. He went on to tell the reporter that he is not anywhere near ready to buy a home.
Let's take a look at the statistics, provided by the National Association of Realtors:
- Fewer than half of all homebuyers use open houses in their search for a home. This is no surprise if you understand that Internet is the primary method homebuyers today look for a house to purchase.
- Half of those that attended open houses rated the event as 'not useful.'
- Only 3 percent of buyers that attend open houses actually purchase the home.
It’s all about location . . .again
The popularity of open houses is also regionally-dependent. A recent study of over a quarter million listings in 11 cities shows that open houses are quite popular in San Francisco and Boston, with 83 percent and 63 percent -- respectively -- of listing agents hosting them. Only 5 percent of agents in Phoenix and 3 percent of Las Vegas agents hold open houses.
In today's fast-moving real estate market, so dependent on modern technology to market and sell homes, open houses may have become obsolete and the energy spent hosting them is better used to pursue marketing methods that actually work.
Then again, in a buyers’ market, when there are many homes on the market and few buyers out looking, an open house may bring additional eyes on your house, thus improving the odds that it sells.
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