What is the true purpose of an open house?
If you said, “To sell my house,” then guess again. The real answer is not what you think—and the truth is one of the best-kept secrets in the real estate business.
Changes in technology have played the largest role in revolutionizing the way buyers find their new homes. Interested home buyers used to browse newspaper ads and real estate magazines or go to open houses. But once online listing sites began to gain popularity, there was no turning back.
Open houses were important in the 90's, but they’re no longer as useful. Why go out and look when you can stay home in your robe and fuzzy slippers and see everything you want to see?”
A common real estate myth is that open houses are an effective way to sell homes. Not true. According to the National Association of Realtors, only 2% of homes are sold as a result of this marketing method. The real truth is that open houses are a great way for realtors to secure new clients, which has a lot to do with their popularity.
The real reason agents line up to do open houses is to recruit clients. Open houses are 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, their knowledge of the neighborhood, and their marketing prowess, all so they can represent the buyer walking through the door, whatever home they wind up buying. Your house is the agent’s best free marketing platform around.
Today open houses are even less useful than ever for selling a home. The Internet and real estate websites have replaced 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 scanning every angle of every photo. Websites, virtual tours, and virtually furnished floor plans are all used to find houses buyers deem worthy of actually visiting. Qualified buyers simply won’t waste time visiting houses they haven’t already checked out online.
The truth is, open houses are a waste of time. Don’t believe me? Ask the National Association of Realtors®, which reported that only 2% of buyers find the home they eventually purchased at an open house.
What About Broker Caravans?
Very Important to the agents that think the Internet is just a fad, these agents have time to drive around to see what snacks each house is having and are not be very busy, or part time agents looking for a social club. Caravans do not help sell your house. A Caravan is about getting to as many houses as possible in the shortest amount of time. It’s in and out and on to the next house. There is no walking and observing and taking notes. It’s less than 2 or 3 minutes per house, movin’ on. They are a waste of time… especially if you are in a fast-paced market.
For the most part, open houses and caravans are a relic of the days before the Internet, when access to listings was restricted to those with a real estate license, though you will find non-technical relics agents that will rave about them, since they don't know how to leverage the Internet. Open houses were the best way for buyers to peek 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 were a way for buyers to see as many properties as possible in one day and get to know a community.
Why don’t Open Houses and Caravans work any more? The Internet!! Over 92% of the home buyers now shop for homes on line, after they see a virtual tour they know if they want to see a house or not. No one seems to have the time anymore to ride around trying to find a home by looking at Open Houses. It’s just not an efficient way to find a new home. It’s so 90’s!!
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