Real Estate agents may not want to admit the truth about open houses. To begin, what exactly is an open house? Why do real estate agents hold open houses? What is the real story regarding open houses
In real estate, there are actually two types of open houses. One is called a broker open house. A broker open house is where a house for sale is made available for brokers and agents to view. The idea is to have agents and brokers see the house so they may be familiar with it, and after seeing it show it to their client buyers.
The other type of open house, the type I’m talking about today is an open house where a home that is on the market for sale is made available for the public to come by and view. The open houses are typically held on Saturdays and Sundays and can be during the week, morning, noon, and there are open houses held in the few hours before dark, they are referred to as twilight open houses.
Agents have open houses for the most part for four reasons:
- To appease the seller. Agents hold open houses to show the seller that something is being done to sell their property.
- To sell the house.
- To build and expand a brand for an agent. An agent increases his or her brand by placing signs throughout a neighborhood. The signs have their name on it, thus showing the neighborhood that the agent is hard at work and successful.
- Open houses are primarily for agents to find, sellers and buyers. The agent is hoping that they can obtain clients to assist while they are holding the house open.
What is the real story regarding open houses? Let’s go over the four reasons one by one:
- It is great to have an open house to make a seller happy; However, statically very few homes sell at an open house. Agents to be fair, hold homes open knowing this and don’t normally inform the seller of this fact. My friend Michael held 250 open houses in the last year and had a total of zero people who considered buying a house that he had held open. In my opinion, this is not serving a seller, as it is out of integrity unless this fact is disclosed to the seller.
- An agent can sell the home at the open house, and it is extremely rare and not the real reason the agent is holding the house open.
- To build a brand for an agent. It is fine to build a brand. And a seller should be informed in my opinion what the agents true intent is.
- Open houses are for the most part, for agents to meet buyers and sellers. The odds of a buyer walking in and that particular home being their dream home is again extremely rare. This is the real truth about an open house.
David Kline Lovett, NextHome First Choice (your choice) Realty