I’ve said this before, often, but when the NY Times says it …

Public open houses don’t sell houses. Brokers hold them to placate sellers and make it appear that they’re doing something to move your over-priced P.O.S. Really – Bill Raveis once showed us the statistics: open houses sell about 1% of the time. It’s all about finding potential buyers, not selling your house, the same as advertising. Those glossy ads in Greenwich Magazine are placed to soothe your ego but, more importantly, to attract other sellers  who are thinking of listing their homes. The ads don’t sell your house.

Think about this: a listing agent who shows your house has, one hopes, spent time with his people and has determined that they are serious buyers with the financial wherewithal to buy a home. If he or she shows up at your house with those people in tow there’s a damn good chance that they have selected yours from a dozen competitors and are seriously interested in yours. A public open house, on the other hand, draws lookers, idle people with nothing better to do with their day and, at best, serious home buyers who have no particular interest in your house. You’ll clear out of your house for this? Fool.

If you doubt any of this, consider how often your own agent doesn’t conduct an open house but instead consigns it to a novice. That’s because she knows no real buyer is going to show up (and her commission is protected in the rare instance one does, because she’ll flip the sucker fifty bucks, if anything at all, for her services that day) and the novice attends solely in the hope that she’ll meet buyers she can turn into clients of her own.

Nothing wrong with that – it’s how I gained some of my best clients when I was starting out – but if you, the homeowner, think that a public open house is accomplishing anything useful for you, think again.

15 Comments

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15 responses to “I’ve said this before, often, but when the NY Times says it …

  1. Mike E

    Did you notice the thinly veiled reference to your site Chris :)…

    “the open house is finding its relevance under attack at a time when ever-more-sophisticated online real estate sites tell buyers much of what they need to know.”

  2. Chris, usually I’m with you all the way– but I gotta disagree on this one. Maybe this is because I sell in an area of town that’s not the trendiest– but easily a third of my listings sell off the first open house. Here’s the scenario: Buyer may be working with agent, who’s been showing in one of the more evenly upscale parts of the city. Buyer sees my ad in the paper (or increasingly often, my pix on the Internet), is intrigued, visits the open house– and calls his agent to write an offer. Gee, says the agent, I had no idea my client was interested in that part of the city until he called me and asked me to write up your house.

    So yes– it’s true that I hold open houses to meet the neighbors, and other newer agents ask to hold my listings open to prospect for buyers. But they get buyers into my listings that their agents haven’t shown them.

    Works for me–

    • Al, I’m often wrong, but I’m delighted to hear of your own success in this regard. And if I start getting listings again (I’ve been turning down the ones offered me because of the seller’s unrealistic price expectations) I will certainly hold an open house. As I noted, I have found great customers from them, even if I never sold the house in question. But in this market, we owe our clients every effort (actually, we always do) and I’m impressed that you’re making this technique work. Good for you!

  3. networthdeclining

    We bought two out of three houses in Greenwich after visiting open houses. Good way to see a lot of properties quickly. And yes we were working with a competant broker. But they hadn’t shown us these. Low probability perhaps. Advertising for the listing agent perhaps. But a waste of time? Most all marketing is wasted. Just hard to know which portion.

    • “Most marketing’ is wasted. Just hard to know which portion”

      Isn’t that the truth? One of my most profitable legal cases came from a yellow page ad in a Westchester book – the client was looking under “L” for “limousine” and saw my ad under lawyers for stock broker fraud. He called – he’d lost a ton of money with his stock broker and maybe, he asked, he had a case? Boy did he. One demand letter later, I had his money back and a fat fee in my pocket. So yeah, the problem is knowing which portion.

  4. anon

    I bought my house in OG after visting the open house after I just happened to drive by and notice the sign. Ironically, I had been using a realtor for a few months who never showed me the listing – I guess she didn’t think it would interest me.

    • Yeah, Anon,and I stand corrected. The odds are low, but if I’m representing a seller, I certainly owe her the duty to present her house to every possible buyer and, as you guys have said, buyers come to open houses. So I repent – I still won’t take an overpriced listing, but when I get a good one, I’ll be out there on the street with balloons and hot dogs, dragging in viewers.

  5. Anonymous

    The owners of a house in my neighborhood listed it for sale in mid 2008 at $4.95. After a series of open houses and price reductions, the place sat stubbornly at $3.95 for a very long time. Finally they got a new agent a couple of months ago who re-listed it at (tahdah!) $3.95.

    The first thing she did was to produce much more attractive photographs for the listing and to schedule an open house to take place on the weekend following the March 13 nor’easter. The owners scrambled to get their yard service to make the property as presentable as it possibly could be by then.

    Result: the asking price has now been reduced to $3.85.

  6. Hey CF, at Raveis the viewpoint was to get listings with the great presentation, etc. Just get it into the MLS and everything will take care of itself. Most agents couldn’t sell a home to save their life, but just get it in MLS, and hope. In strong markets, that works. That is why your viewpoints are well taken with what you do.

    Anyway, open houses can be a good avenue, especially for agents who cannot sell anything but a good listing presentation. At Raveis, it was viewed as part of the bag of tricks. And I am certain it is at many other brokers.

  7. Old School Grump

    The payoff from an open house may not be direct, but that doesn’t mean it isn’t there. Yes you do get a lot of nosey people with too much spare time, but you also get people like myself who are contemplating a local trade-up but want to get a sense of what’s available at what price without showing their hand.

  8. networthdeclining

    BTW. Since when are you treating the NYT as gospel anyway.

  9. Old School Grump

    Looking at my earlier comment and your response makes me think I’ve misunderstood the listing broker’s hoped-for response to a public open house.

    When I attend one and want to come back for another look, I arrange it through an agent I know well and who will definitely be MY listing agent for my current house. The listing agent for the house we go back to will likely not even know I went to the open house (especially if he or she farmed it out to a lackey).

    So if a serious prospective buyer at an open house is supposed to jump into the listing agent’s arms and enable him to do both sides of the trade, well, I guess it is usually a waste of time. Is that indeed the hope?

    • Old School, open houses usually draw unrepresented buyers. The hope of the agent waiting in the shadows in not necessarily to sell that particular house (which almost never happens) but rather to convince the buyer that they have found an honest, capable agent worth working with. And, occasionally, that happens.