Real Estate Investing :Open Houses Can and Do Sell Homes

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Here’s my philosophy on the practice of hosting Open Houses: they can lead directly to a contract. I stress the word can.



Based on my experience, I’ve found Open Houses to be most successful when:

1. The market in which the home is listed has a preponderance of unrepresented buyers. I’m speaking both geographically and in terms of the price range. Depending on the town, I’ve found a huge difference in the percentage of unrepresented buyers. That percentage can also vary based on the price range. Unrepresented buyers are more likely to visit open houses and more likely to write an offer based on this first showing.

2.  The home is a value. If a house is priced well, then you’re likely to get people motivated to act quickly as a result of the Open House.

3. There is high demand or low inventory. If the home is in a highly desirable neighborhood where homes are rarely sold, then there are likely to be some buyers who have been looking for a while and waiting.

All of these translate into high traffic at the Open House, which in turn leads to a sense of urgency on the part of any interested buyers.

When it works, it works.
I hosted an Open House in New Britain over the summer (post tax credit) and had 30-40 people walk through. Almost none of the people were represented by a Realtor (several told me that they refused to hire one because they didn’t trust agents). The neighborhood was in high demand and there are rarely any homes listed. Ultimately, the house was sold to one of the people who walked through.

Open Houses can also be used to generate showings and interest.
Imagine you’re a buyer and you have 100 properties that come up in your price range. An email or ad highlighting an Open House can make that property stick out in your mind, leading you to call your agent to schedule a showing.

Open Houses can also be useful in gauging what is right and wrong with the home.
There is nothing better than direct feedback from buyers. Some things I think will be a problem aren’t. Buyers will point out faults that I hadn’t considered. This feedback can help the seller and agent determine a better strategy for selling the house. I like to think of it as a focus group.

Dirty Not-so-secret: Open Houses are used by many agents to appease their clients, look busy and get buyers.
There is a lot of truth in this. I’ve attended Open Houses where you never see the agent (she’s hiding in the kitchen). You ask them a question about the house and “Gee, I’m filling in for XYZ Agent and I don’t know.” But they make sure to remind you to sign in.

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