The Case against Open Houses

I’ll be honest, I’m no fan of open houses. I believe it’s an antiquated sales technique in a market that has since moved on. There are a few reasons I feel this way. The first and foremost is the rise of the internet. Secondly, feeding freshly baked cookies to tire kickers and your neighbors won't yield a sale. In addition the safety component is a real issue. I don't know about you, but I'm not too keen on complete strangers coming into my home and walking around. Ultimately though, I just don't feel they are effective. There are much better ways to market a home these days.

What the data says

In 1995, roughly 4-5% of buyers were looking for homes on the internet. Today 90-95% search for homes online. It’s no secret that the internet has revolutionized the way we buy and sell real estate. Large websites like Trulia and Zillow take up the lion’s share of the online market place. Local brokerages and individual Realtors also offer MLS access to customers. In other words, we are saturated with housing data and can access it 24/7 in a variety of different ways.

I know what you’re thinking; a picture is not the same as viewing a home in real time. I completely agree. But in my experience, those who are serious about purchasing a home almost always do three things:

  • Get qualified with a lender
  • Look at Las Vegas and Henderson homes online (on a third party website or with their agent’s MLS notifications)
  • Go look at the homes they are interested in

Buyers who are sincerely motivated, look at homes after making an appointment through their agent. Surveys have shown that less than 2% of homes are sold through open houses. In other words holding an open house was unnecessary, as it would have sold regardless.

Meet your neighbors

Over the years I’ve found that open houses bring out bored neighbors, people who aren’t qualified and others who still have a house they need (or can’t) sell. A recent poll found that 62% of Realtors said that attendees of open houses “are not serious buyers at all.” I would agree with that. I’ve talked to countless looky-loos, who after a series of questions, admitted they lived around the corner or still had a home they wanted to sell “next spring.” Yes prospective buyers can show up on your doorstep, but I’ve found that this is rare. Even rarer is that this small pool of qualified buyers will choose your home.

Fishing for buyer leads

Some brokers like open houses as a means to find new buyer clients. There is something to be said for face-to-face interaction. It’s much easier to build a professional relationship in real time. From a business perspective however, I believe there are much more efficient ways to build my client base than wasting my seller’s time. It also goes without saying that holding an open house as means to primarily benefit myself is unethical. 

Stranger danger

Open houses march a parade of strangers through your home. The majority of these prospective buyers are harmless, but attacks can and do happen.  Real estate agents have been beaten, robbed and even murdered showing homes. Owners representing themselves have also become victims of violent crimes. Agents or homeowners intent on holding open houses here in Vegas should work with another person, plan escape routes, keep doors unlocked, requires signup sheets, ask for photo IDs and try to get tag numbers. Does this sound like a fun way to spend your weekend?

The bottom line

A home sells because it’s positioned correctly in the Las Vegas real estate market, shows well, is professional photographed and aggressively marketed online. Motivated buyers research neighborhoods, schools and comparable sales before seeing homes they are interested in. The bottom line is that agents, as well as sellers, have waned on this outdated marketing tool over the years for a reason: It’s simply not effective.