Do Open Houses Sell Houses?

by Binyamin Appelbaum March 26, 2008 04:03 PM
'Tis the season for open houses. But what if open houses are a waste of time?
I think many sellers see an open house as a sign that their real estate agent is trying. So they want an open house, or two, or three. The irony is that many real estate agents say they mostly hold open houses to convince the seller that they are trying. It seems to be fairly common wisdom in the real estate industry that open houses don't sell houses. The rule: Serious shoppers make appointments.
There's another thing sellers should know: Agents aren't just agreeing to hold open houses as a form of appeasement. An open house is a wonderful place to find new clients -- people looking for a new home, and those thinking about selling.
This is not necessarily good for you, the seller. Imagine a potential buyer walks into your kitchen. They want to buy a home, but they're not sure this is the right one. 'No problem!' says the agent. 'I've got another five homes similar to this one. Maybe you'll like one of those better.'
An extreme example of this is an agent in Phoenix who posted on a discussion site that he likes to hold open houses in empty homes where he hangs on the walls pictures of other houses that he's trying to sell. If you owned that home, how angry would that make you?
Or take the following blog post by entitled, "Is it stupid to hold an open house?"
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.
For buyers, I think the advantage is it lets you see houses on your maybe list without having to make an appointment. Sometimes someone buys something. But not very often.