(Disclaimers: The owner/president of RPM Inc. is a licensed REALTOR® in Prince Edward Island, Canada. Also, this article is not meant to represent all locations and all other REALTORS®. This discussion is relative to the North American real estate market in general, and PEI is no exception. Your mileage may vary.)
Want to hear the truth? Here it is:
Open Houses are often not used to sell your home. Open Houses are very often used to get new sales leads for your REALTOR®, because it’s a low or no-cost way to meet prospective buyers who aren’t yet working with another agent.
Stop pinning your hopes on the magical “Open House”
Since—according to the National Association of REALTORS®—more than 90% of homebuyers use the internet to start their home search (compared to less than 4% starting their home search with Open Houses), it’s obvious that the web has rendered the Open House virtually obsolete. North American REALTORS® have often stated that Open Houses are a waste of time (even more so for rural properties) and, because an Open House can also be a security threat to both the REALTOR® and homeowner, many sellers have opted to skip the Open House and have their home shown only to serious, viable, pre-qualified buyers.
There are probably some markets where Open Houses can bring qualified buyers, and possibly help sell a home (ask your REALTOR® if they’ve ever sold a home at an Open House, and also which ones). However, based on decades of real estate experience and years of observation in both the New York and PEI real estate markets, Open Houses are not useful as a home marketing tool.
Do any of these scenarios sound familiar?
- You’ve had an Open House every weekend for the past six months and haven’t received one qualified offer. (The market may be telling you that your home is priced too high, and/or the Open Houses aren’t attracting serious buyers.)
- Your REALTOR® told you there wasn’t a good turnout at your Open House, and the reason given is either (a) it’s too nice out, people are at the beach, or (b) it’s too dreary out, people won’t come out in the bad weather.
- Your REALTOR® tells you there was actually a good turnout, and that quite a few people “seemed really interested”, but it seems none of these “really interested” people have actually put pen to paper to present an offer.
The most telling scenario:
- You’re working with one (carefully selected, possibly veteran) REALTOR®, but are surprised to find another (usually newbie) REALTOR® conducting your Open House. Want to know why? Because Open Houses are actually the perfect venue for helping new REALTORS® get their feet wet. Many veteran REALTORS® know that there’s very little sales value in doing an Open House (some even have zero visitors), and they will spend their own precious weekend time doing something fun or meaningful with friends and/or family. The newbie REALTOR® will gladly give up their weekends to do Open Houses for other established REALTORS® in order to get their name and face out there. (Most veteran REALTORS® did this when they started their real estate career, too.)
Based on both direct observation and discussions with other REALTORS®, Open Houses are great for:
- giving nosey neighbours a grand tour of your home
- allowing other homesellers the opportunity to compare your home to their home
- providing time-fillers for people out for a “Sunday drive” or while they’re in between events
- giving looky-loos something to do on a rainy weekend
- providing the afternoon’s entertainment to the perpetual “Open Housers” (people who have been “looking to buy” for years and go to every Open House, every weekend—local REALTORS® know who they are)
- providing afternoon snacks to people who are too cheap to buy lunch (many are Open House regulars)
- allowing tours to people who “know the brother-in-law of their cousin’s daughter who used to live here 20 years ago and just wanted to see what the inside of the house looks like now”.
- giving petty thieves a freebie opportunity
- providing decorating ideas for people who just bought or built a house (especially a similar house)
- telegraphing that the house is hard to sell (based on holding frequent or numerous Open Houses)
- helping new REALTORS® get their feet wet in the industry (possibly the top reason)
So there’s the truth: Open Houses are not effective marketing tools in selling your home. Although your REALTOR® may have sold a home or two over years and years of holding Open Houses, some REALTORS® admit that less than 2% of their listings sell at an Open House.
Open Houses are a way of keeping the vendor (you) happy, and a REALTOR® should do an Open House if you request it. However, if a buyer is serious, they will schedule a private viewing to see your home. If a buyer can’t be bothered to make the time to schedule this all-important step in their home search, they aren’t ready to sign on the dotted line.
Why waste your time—or your REALTOR’S®—showcasing or allowing access to your home to people who aren’t viable buyers, when you both could be focusing your time and effort on buyers who are pre-screened, pre-qualified and ready to make a commitment?
If you’d like more information about this or any other real-estate related matters—such as ideas that actually can help sell your home—check out future articles or give us a shout at (902) 393-2263 / firstname.lastname@example.org. We’re here to help!