If you venture out for a Sunday drive this weekend, it’s almost guaranteed that you’ll see at least one open house sign. Sometimes you may see several. With that being the case, you probably wonder if hosting an open house will sell your house, too. The answer?
Yes—kind of. It’s complicated, and it doesn’t happen in the way you’re probably imagining.
What Do Open House Statistics Say?
There are two major statistics that should concern both FSBOs and those people working with an agent to sell your home. Both come from the 2016 edition of the Profile of Home Buyers and Sellers produced by the National Association of REALTORS®. The first piece of data deals with the frequency of open house attendance reported by buyers of homes. The breakdown is as follows:
– 50% of buyers rarely attended or not at all
– 37% of buyers occasionally attended
– 13% of buyers frequently attended
As you can see, half of the buyer pool hardly ever or sometimes never attends open houses. You may think the other 50% gives you a pretty good chance of selling, but the second important statistic from NAR’s Profile of Home Buyers and Sellers is even more alarming: less than 1% of all homes nationwide were actually purchased by someone who attended that home’s open house. This means that even though half of home buyers are occasionally or frequently attending open houses, your chances of securing one of them as the buyer for your home are extremely low.
Why Don’t Open Houses Work?
Open houses worked much better in the past when buyers were only able to see homes for sale by physically visiting them. With the power of the internet, prospective home buyers can now see the inside and outside of nearly any home for sale without taking the effort to physically travel to the house’s location. This widespread availability means that many consumers are able to mark homes off their list before ever stepping foot inside. Another reason is that open houses attract the wrong type of buyer–those who are not really motivated or ready to buy. As the previous statistics suggest, hardly anyone attending your open house will be potential buyers. More often than not, open houses attract neighbors and other curious parties who may be selling their own home soon and just want to compare its value to yours, or they may just be nosy. Most of the legitimate buyers that visit open houses are planning to buy a home comparable to yours later down the road, and they may not have even put up their house for sale yet. On the slim chance they’re ready to buy at the time of looking at your home, it’s more likely than not that they have several other houses in mind—at this point it’s simply up to the buyer’s preference.
Why Do Agents Still Do Open Houses Then?
This is where it gets complicated. Many agents will swear by open houses, and there is one main reason for this: it’s how they pick up business. Most of these agents are inexperienced and have a minimal list of buyers they’re currently working with. In this example, the agent hosting the open house will be worrying more about the people who walk in the door than they are selling your home—the open house sign in the yard is bait. Instead of marketing and showing all the great features of your house, they’ll mostly be conversing with these visitors hoping to pick them up as potential buyers. Some agents will still try to sell your home at the open houses, but there are many who only host to harvest leads for themselves or a buyers agent. Now you can see why so many agents like hosting open houses.
The Horton Team likes hosting open houses as well, but not for the same reason as most agents. We sell MORE houses BEFORE the open house BECAUSE of the open house. How does that make sense? If you’ve ever sold a home before, you’ll know that potential buyers are constantly driving around, slowly passing by your home for sale. They’ll go out of their way, sometimes with family members, sometimes even by themselves, just to take another look at the home. As soon as an agent approaches us with an interested buyer, we put an open house sign in the yard. Why? The fear of loss. Buyers will develop a sense of urgency once they see that the home they’re falling in love with has an upcoming open house. Although less than 1% of home buyers purchase a house they visited during open house, there is still a stigma among buyers that someone attending the open house will purchase the home before they’re able to make an offer. The interested buyer brought forth by the agent above will see this open house sign and instantly become much more likely to bring a high offer to the table that will beat any other offers before the open house even takes place. The Horton Team is able to sell more houses each year in Newburgh and Evansville using this strategic open house method to get buyers off the fence, and it might just be the perfect strategy for your house, too. Don’t let your home be another agent’s bait.
Open houses can sell your house, but probably not for the reasons you’ve always thought. If you’d like to learn more about the finer details of our open house strategy or are interested in buying or listing your home with the Horton Team, contact us today—we’d love to hear from you!