The prospect of sitting in a listing for three or four hours on a weekend is enough to turn any agent away from the idea of holding an open house. But think about this: open houses are being held more often today not to sell a home, but instead, to gain more referrals and future clients, as well as build a brand.
In 1995, according to data from the National Association of Realtors, 41 percent of people surveyed relied on open houses to sell their home. By 2000, it had dropped to 28 percent. Beginning in 2003, however, as the market started to heat up again, that number started to increase, and by 2005, 51 percent of all sellers were using open houses, though not all agreed they were effective. Some 45 percent of sellers found open houses only “somewhat useful” and another 12 percent didn’t consider them useful at all, according to NAR. But that’s more because open houses aren’t really instrumental in selling a home – they can be, but more often than not, an agent will hold one to get referrals.
“I make sure to get quality agents who are committed for the long-term to sit at my listings,” Frank Montro, broker with Oak Realty, says. “If an agent is willing to invest the time, they can make a great return on their investment. If you sit at an open house regularly on a Saturday and Sunday, for three to four hours a day, that’s only six to eight hours of your week. I’ve got an agent who does this who is averaging two to three deals a month, making a decent living, working part time.”
In this technological time, agents might assume that homebuyers can see what a house is all about from virtual tours and interior photos spread across the web, but one of the first things agents learn is that every property, no matter how similar to the hundreds of other houses nearby, is a totally unique being unto itself; the subtle things, like the way the sun hits the property in the afternoon, the gentle slope of the driveway, how the sunrise fits perfectly between two trees in the backyard every evening – these are the things that make a home special. For proponents of the traditional open house, the spirit of the place is something you can’t convey over the Internet – it is best to be experienced.
“I have found that open houses don’t generally sell listings, but they are a great marketing tool,” Mary Lou Allen, an agent with Century 21 Affiliated in Skokie, says. “My belief is that there are several important steps in getting a contract on a home. You can’t just stick a for sale sign out there, put it on the MLS and hope to land a buyer.”
What Open Houses Really Are
Many agents get frustrated with open houses because they don’t understand what an open house really is at its core. On the surface, an open house is a way of exposing potential buyers to your listing. In a 2011 NAR profile of homebuyers and sellers, NAR found that 45 percent of buyers actively look for open houses and that open houses were useful in their search for a home.
But there’s an extra bonus that comes with open houses – they provide agents with a comfortable way to meet all the neighbors.
“People wonder what we do at an open house,” Donna Schwan, CEO of MetroPro Realty, says. “Open houses are like ‘opening night.’ Potential sellers get to see you work, your presentation of the house, everything about how you present the home and yourself to incoming, prospective clients at a property. They test how much you know about the listing.”
Since buyers are more educated about the market, many come in already knowing about a home after having seen it online.
“Today, I don’t think people go to open homes unless they’re looking for a new home or to list theirs,” said Beth Schoonenberg, an agent with John Greene Realtor in Naperville. “I get the feeling that the people I talk to are not just ‘tire-kickers.’ The people I’m seeing looking at open houses are seriously looking – they’re taking advantage of the market. Some of the people I meet don’t really know how to start the process, and it’s scary for them to call direct to the real estate office. Those are the buyers you want. You can help them get started with their sale or purchase.”
In addition, inviting the neighbors can lead to potential prospective clients and buyers interested in your seller’s home.
“Our job as agents is to market the property – even to the neighbors who have no intention to buy, but who will tell someone else about the great house they saw at an open house,” Allen says. “The neighbors are the people who want their friends to move into the neighborhood. They’re great ambassadors and can help agents.”
Montro agrees that neighbors are an overlooked asset. “There is a great free website that details all of the names and phone numbers of people living near the home you are doing an open house: Neighbors.WhitePages.com,” he says. “Pair it up with the Do-Not-Call list and you can personally invite neighbors. I did a sample study of 100 closings, and the results were amazing: 70 percent of the buyers lived within a four-block radius of the homes they bought.”
Getting People to Your Open House
Marketing an open house in advance is pertinent to an open house’s success. A successful open house is a busy one, so getting people there is key, obviously. Not as many people are getting the newspaper – people spend most of their time looking for homes and open houses online.
“Our broker’s ads drive everything to the company website,” Schoonenberg says. “From there, we also advertise open homes. I will get people who just happen to be driving by, but for the most part, they’re finding out about my open house from a criteria search somewhere.”
What clients find when they reach your website or view your listing on Realtor.com, Zillow or Trulia can make a world of difference to their response. Even though photos and marketing remarks can’t capture the total essence of a listing, they often influence buyers’ interest in viewing through showings or open houses.
“If you’re not on Realtor.com, you should be,” Schoonenberg says, “mainly because it offers apps that can greatly help agents who are holding open houses. You can post an open home there and the Realtor.com app alerts people who are looking for similar homes. The buyer’s got it all set up, they know the price and have interior photos – they’re at your open house with purpose. Same with advertising open houses on our MLS – people searching for a specific criteria will be able to see when a home that fits their criteria is open that weekend. Then they can look at their leisure and don’t have the pressure of an agent hanging around.”
Criteria searches and MLS open house listings can work in combination to sell homes better than any flyer campaign.
Since neighbors can be your greatest asset, make sure anyone walking or driving by knows an open house is coming up. Post signs that can be seen from main roads, and not just in front of the house, but in areas such as in front of the subdivision or at the nearest corner, as well.
But, Montro says, be careful not to overkill advertising – sometimes it really might not be necessary. “If you have a home on a busy street, you almost don’t even need to advertise,” he says. “One sign visible to the street is all you need. The turnouts on busy streets are always great.”
Another important point: don’t forget to reach out to your sphere of influence. Several agents you know could have buyers looking for a home just like the one you’re showing at your open house.
How to Make an Open House Great
If nothing else, an open house is among the most effective marketing tools an agent has for demonstrating his or her value to the public. What better way to impress potential clients than by showing them how you present a home?
“Naturally, when you do an open house, it’s going to look its best, so why not make every listing look its best, then do an open house while it looks so good?” Allen says. When Allen sold her client’s home to a buyer who attended the property’s open house, it was evident that closing the sale is all in the details – all the little things that consumers might not notice really help make a home look its absolute best.
If you haven’t spent a significant amount of time marketing your open house, getting people there will be much more difficult. Inviting key agents you know, your sphere of influence and all the neighbors near the property is your first step. The second is to advertise, with postcards and signage in front of the property and near busy and nearby roads to make sure that people you don’t get to personally invite, but who might be interested, know there is an open house coming up. Usually a week in advance is enough time to start putting up signage, postcards and invites.
But no agents should ignore technology and the benefits it can provide in terms of marketing your open house. Agents can spend hours producing content for their websites or listing pages, but then they’ll forget to promote them elsewhere online. Email evites or eblasts for your open house to your database. Advertise the date and time on your website, blog, Facebook, LinkedIn and Twitter pages. Blogging or using social media and linking to the virtual tour and info about the open house is a great way to advertise. “Social media absolutely works,” Montro says. “I have gotten a great response from Facebook and LinkedIn, and somewhat from Twitter.”
In between marketing your open house and inviting homebuyers and other agents, you’ll need to prep your property.
- Make sure the home looks kept up – part of being a good agent is making sure you sell the property, and to do that, you may need to roll up your sleeves and mow the lawn, trim the hedges, water the lawn and flowers (or even plant some flowers) to make sure the home looks kept up and taken care of.
- Make it sparkle – showing a kept up house means the inside, too. Scrub those floors, dust, clean the windows, declutter and make sure the interior looks its best.
- Offer food or drinks – sure, people will stop by to look at the listing. But they’ll remember it more if you put out brownies or other tiny, tasty treats, or beverages. You can do this simply by putting out a tray of appetizers in the kitchen, or make it a party, like one top producer we know who had a “margaritas by the pool” open house.
- Make sure the driveway is clear – if you’re showing a single-family home, make sure there is ample room to park. Don’t make it a chore for buyers to attend the open house.
- Hold it during off-hours – people have jobs, families and other things that keep them busy during the week. The best time to hold an open house is during the weekends in the afternoon.
- Make it smell inviting – just remember these two important points: if it smells like cookies, be prepared to offer some to homebuyers, and refrain from spraying air fresheners or perfumes as some people can be allergic.
- Let the light in – let homebuyers really see the house. Open all the drapes and blinds to let natural light in the home, in addition to turning the lights on in every room – even bathrooms and closets – so homebuyers can clearly see everything. But don’t turn on lights that also switch on loud fans.
Then, it’s smart to add a final touch, especially in today’s market, that several agents don’t do: put out information that contains financing options so buyers can readily determine their monthly mortgage payment. Montro utilizes this strategy to make sure homebuyers know if they can or can’t afford the home, and if they can’t, he is ready to talk about their financing options.
“I try to get a loan officer to sit with the agent at every open house,” he says. “The loan officer is able to prequalify and run a credit report on the spot. We have literally sold homes during the open house using this formula. Most buyers visiting the open houses either buy a different home or aren’t credit worthy. The loan officer has a credit analyzer program. We counsel buyers and get them on a credit plan to repair their credit to make them homebuyer-ready. Most people don’t know that with a few simple fixes and a little discipline, we can get their credit ready in a couple of months. We require the people who get in our credit program to come to an open house once a week. This keeps them accountable, focused on their credit repair goal and motivated by seeing our other homes.” Of buyers who partake in the program, Montro says his conversion rate is 80 percent.
The other key to making an open house successful is follow-through. Many agents keep track of attendees, contacting them when the house has a price reduction.
“A database of open house attendees is critical to grow and maintain. Most buyers are not ready today, but they will eventually buy,” Montro says. “If I keep a line of communication open with them, they will buy with me when they are ready. Otherwise, they will buy with whomever they are talking or communicating with when they are ready.”
About a month ago, Allen listed a property with an immediate open house announcement, and her clients took her advice on removing the carpeting, refinishing the hardwood floors, depersonalizing and staging the home.
“I managed to list the property on the MLS late Saturday evening and did an open house the following day,” Allen says. “Did the open house sell the home? I guess you could say it did, but it did because the buyers saw the open house notice late Saturday night. In fact, the buyer’s agent was out of town! I had 15 different buyers come through that open, of which three were just walk-ins who saw the sign. The others all came because of the open house announcement on the MLS.”
Virtual Tours: The New Open House?
Some agents say that open houses are on the way out and virtual tours will soon replace them. For one thing, seeing a video of a home online is much different than being there in person. How can homebuyers see the neighborhood? Hear how quiet or noisy surrounding streets are? See what the views are from each and every window? See if the granite, floors or walls look like a different color – a shade darker or lighter – in person vs. on camera?
There are also a few other constraints that keep virtual tours from being the new open house. If open houses are mainly a place to get referrals, how will agents get referrals from a virtual tour?
In addition, and surprisingly so, it seems that still, agents aren’t using technology to their full advantage, especially when it comes to video and virtual tours. LeapRE compiled data from the MLS and found that, as of April 2 of this year, 68 percent of agents do not provide virtual video tours of their listings. That’s more than two-thirds of all Chicagoland agents. So, are virtual tours really the open homes of the future?
Agents like Schwan, who are die-hard believers in the open house, use virtual tours as an additional way for buyers to get a sense of the property before they step inside.
“Virtual tours can make people seasick,” Schwan says, who didn’t want that effect for her buyers – she hired a filmmaker to produce her most recent video virtual tour for her listing at 1610 N. Honore. And, since Schwan does not want to replace open houses, she views showing video virtual tours as a way to get homebuyers interested in attending an open house or seeing the listing.
“A virtual tour is just another way to get people to call you to go see the home,” she says. “You have to decide if doing a video will get buyers out to see it. I made that decision with Honore because it’s such a distinguished looking home.”
While not all lookers are buyers, advertising an open house, both online and off, can spread the word and get people to the location of the open house, and hold them there long enough for them to really get a feel for the spirit of the place.
“I had one recently where I couldn’t tell you how many people were there. There were just people all over,” said Schoonenberg. “Open homes are picking up, and people are much more curious to see them, with prices being lower. It gives people a little bit of freedom to go out and kind of leisurely look at something in their own time frame.”