The truth about open houses

Do open houses work?

Yes and no.  

Nice and clear, right?  Okay, let me rephrase the question:

Will an open house sell your house?

They certainly can, but realistically it's not very likely.

An open house is open to all, so there is no commitment or real connection to an agent required.  Anyone can show up, and there is a feeling of anonymity.  Because of this open-ended nature of open house attendance, you get a lot of nosy neighbours, as well as "tire-kickers" who may be serious about buying but are still some months away from being ready and are just checking out the market.

So why do agents do open houses?   Good question.  

Real estate agents are still happy to do them because they do work -- for them. 

They can be a great business-building opportunity for the real estate agent.  While some visitors may just be Fred down the street coming to see how the Smiths are living, many people coming through open houses are legitimate buyers, whether current or in the near future.  If these buyers are not working with a buyers' agent, it is an opportunity for the listing agent doing the open house to connect with them and possibly become their agent, whether they buy your particular house or not. *

Of course, while they do sometimes provide a better opportunity for the agent to find new buyer clients than to actually sell your house, they do have the potential to get a lot of potential buyers through in a short and convenient time span.  Personally, I won't push open houses on clients who dislike them, but I am also quite willing to invest the time & effort if they would like me to do one.  As the old saying goes, it doesn't hurt to try.

* As a little side-note:  I remember one company suggesting in their marketing materials that such cross-selling is a negative of the traditional real estate industry.  Please understand that I am not saying that here. In fact, I would suggest such cross-selling, whether from an open house or an email through the MLS® system, is actually a huge benefit of being listed with a full service agent.  While your agent may show your house and sell the buyer a different property up the street, the agent up the street may also show their listing but sell your property instead.  The MLS® system gives you a huge sales force consisting of all local real estate agents in the field. 

Selling difficult or "impossible" properties

Whenever possible, the ideal situation is for the seller to fix any problems that may be outstanding on a property. But there are times when it may not be financially feasible for any number of reasons. It is not the end of the world to list a property for sale with issues, but there are two important things a seller must do if they expect to sell at a proper price and in a reasonable length of time.

First is to make sure you are pricing appropriately for the condition of the property. If a buyer can get a similar property at the same price with absolutely no work to do, you’re going to have a hard time competing in the marketplace. Buyers will expect a lower price if they’re going to have to put in time and money to fix things up, especially if they’re significant items like an old roof or leaky basement.

The second very important step, which actually helps with pricing, is to get written quotes from qualified contractors for any major issues. But besides giving you solid numbers to use for deductions from asking price, a written quote will give comfort to buyers and remove the fear of the unknown – what a seller may “know” to be a $2000 repair can easily be blown up into a $20,000 (or more) repair in the buyers’ minds. Written quotes remove the question marks and replace them with solid figures.