I’ve defended Open Houses for a while now, but I’ve swung about to Jonathan Dalton’s point of view on this one. (Enjoy your victory Jonathan.)
Open Houses are terrible at selling homes. That’s why established agents take the day off and get newbie agents to do their open houses for them.
It just seems to be a straight math problem. I think NAR figures had 4% of all homes sold from open houses. If each house had 3-4 open house events, then it seems like any individual open house has around 1% shot at a sale.
So as an agent hoping to actually sell the house, I’d in theory need to do an open house every week for almost two full years to get up to a 100% shot of selling a single house.
Each open house takes about 5 hours with printing up flyers, driving out there, plonking down signs, standing around in the open house, collecting signs and driving back home. So 5 hours x 100 open houses = 500 hours to get one sale. Do the mental math for the standard commission in your area divided by 500 hours and then pour yourself a stiff drink. For me it pays less than minimum wage and more than if I was in prison.
Though prison comes with health benefits, so it’s kind of a wash. Meanwhile actual showings probably have a 5-10% conversion ratio to actual offers on the house.
Open Houses are for Sellers!
Newbie Open Houses are held to shut the seller up, and to have the agent try and pick up buyers for other houses. End of story. This is specially true if another agent is covering the open house for the listing agent. There is a mere 1% shot at a hope to get a buyer for the house, and there is at least half a chance the buyer already has an agent. In that case, even if it sells from the open house, the newbie agent covering in won’t see a dime from the transaction.
Admitting that the only real reason to waste a Sunday doing an open house is to try and snap up some new buyers – the other issue is that usually next to no people actually show up to open houses without heavily investing in marketing of the open house. Those postcards, mailers and newspaper ads etc all ad up. The question is whether or not advertising dollars spent this way are as good as attracting buyers as advertising dollars spent in other ways. Farming cards, painting your car like a billboard, slipping business cards in your kids lunchbox to give to friends at school etc.
Personally I think it doesn’t add up to a good investment of time and money anymore.