So what is the true purpose of an open house? If you said, “To sell my house,” then guess again. The answer is not what you think—and the truth is one of the best-kept secrets in the real estate business.
The real reason agents line up to do open houses is to recruit new clients. Open houses are often training and recruiting platforms for new agents, or agents who do not yet have listings of their own. Yes, they exist to sell homes, but they also exist to sell brokers. Brokers want unrepresented buyers to fall in love with their charm, knowledge of the neighborhood, and marketing prowess, all so they can represent the buyer walking through the door, whatever home they wind up buying. Your house is an agent’s best free marketing platform around.
Things are changing, however, in hot markets like San Francisco, San Jose, and New York, open houses are less useful than ever for selling a home. Real estate websites have begun to replace them. Most buyers find houses online in the middle of the night, when the kids are asleep, comparing one listing site to the next, clicking through slideshows, and carefully scanning every photo. Websites, virtual tours, and virtually furnished floor plans are all used to find houses that buyers deem worthy of actually visiting. Qualified buyers simply won’t waste their time visiting houses they haven’t already checked out online.
The truth is, open houses are a huge waste of time. The National Association of Realtors® reported that in 2014, only 9% of buyers found the home they eventually purchased at an open house. That’s down from 16% in 2004—and the number of buyers who even visited an open house has dropped accordingly, from 51% in 2004 to 44% last year.
For the most part, open houses are a relic of the days when access to listings was restricted to those with a real estate license. Open houses were the best way for buyers to take a look inside a prospective house without having to make a solid appointment with their agent. (For some reason, people see this as “bothering” the agent whose job is precisely to be bothered in this way!) Open houses allowed buyers a way to see as many properties as possible in one day and get to know a community.
Today’s buyers save viewing properties as the fourth step in their buying process, not the first. (The second step is meeting their agent and third is getting pre-approved for a mortgage.) According to NAR, 43% of buyers are using the Internet for their initial home search. They research the prices, finishes, school districts, and comparable sales before they ever talk to an agent. Thanks to the Internet, today’s buyers are better informed than ever before.
Which all goes to say, open houses are just not what they used to be. Of course, new construction homes are a different beast entirely. Home builders rely on model homes and unsuspecting novices to fall in love with fancy finishes that are seldom standard and sign the bottom line right there on the spot. And it works. Homebuilders have mastered the art of luring and closing.
Please don’t cry for the dying of the open house. It just means the role of the real estate agent is changing. Home buyers are smarter, so agents now have to work smarter, too. And as agents get smarter, the home buying and selling process should get easier.
If you are in the market for a new house and would like information on homes for sale, or are first time home buyer not working with a Realtor and would like to schedule a consultation with a qualified Oakland County and Macomb County Realtor, please complete the Lang Premier Properties contact form to have a real estate agent contact you.
Lang Premier Properties are Birmingham Realtors specializing in Oakland County Real Estate. Stephanie is an agent with Lang Premier Properties. See what past clients have to say about Stephanie Lang. Lang Premier Properties looks out for your best interests when you purchase a new custom luxury home. We always recommend working with an experienced luxury real estate agent when buying a new luxury estate.