The Death of the Open House

By
Mortgage and Lending with Home Loan Consultant 12345   

I recently saw a report that showed that here in Las Vegas, we have over 31,000 houses for sale.  This is a lot of homes for us.  In fact, its a record.   I also saw that 44% of these are vacant.   Thats over 13,000 vacant homes.  That is a lot as well.

I live in a very popular master-planned community in Las Vegas, called Summerlin.   It was once the nation's top selling community. 

When the market was hot, real estate agents would have to get to the hot corners to put up their open house signs the night before to make sure they got a spot.

Last weekend, I saw one open house sign as I drove around all weekend.  One.

I looked in the newspaper.  Of the 31,000 houses listed for sale, there were 30 ads for open houses.  Less than 1 in a thousand.

I called one of my close agent friends with these "shocking" statistics and she told me, "Aaron, open houses are a waste of time."

Some of you know that I started in real estate in the mid 90's as an agent for a top national brand broker.  I switched to mortgages a few years later.  

Although I have some experience and training as a licensed agent, I am a dedicated mortgage professional, so I would never tell you how to run your business, but.....how can this be?

I know the market is soft and traffic cannot be good at these open houses, but 1 in every 1000? 

I know that three of four people turn to the internet to view homes, but 30 total advertised?   

I know many agents and sellers think open houses are a waste of time, or a security risk, but 999 of 1000?

According to the stats, in 2005, 51% of all sellers were using open houses.  I would doubt those numbers are even close today.

If I were selling my home today, I think I would want to use every method in the world to help me sell it or at least convince me that my agent was doing everything possible in their power, including the open house on occasion.

If I were a listing agent today, I think I would want to do the things my competition wasn't doing. 

It seems like an open house in a master-planned community that was once the nation's best-selling would be one of those things.   There was one sign in my entire neighborhood. 

I would bet that agent got traffic that day.   Although the chances are he didn't get a buyer that day I would be very surprised if he didn't get an opportunity to meet a few potential prospects and pass out a few business cards. 

If I were an agent today, with 31,000 homes for sale, I think I would be looking for creative ways to differentiate myself.    

How about getting with the agents who have the other five listings in the same neighborhood and having one big neighborhood tour that you can jointly advertise or market? 

The stale, old, unwanted, bothersome, boring, uncreative, no-good open house, may be one of the most best ways to help separate you today.  

As far as I can tell, I am nearly alone in my opinion.  Everyone else here in Vegas thinks its dead.

 

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Rainer
13,122
Mary Ann Grafft
Keller Williams Realty
In my market area an open house without advanced marketing can be a waste of time.  One of the things I have been doing to increase my traffic is to send out postcards to the neighborhood advertising the event.  I ask them to invite their friends and relatives.  This makes my seller happy and allows me to meet the neighbors and collect names for my data base as well as be in front of potential home buyers and sellers.  I think this is more productive than floor time.
October 18, 2007 04:15 PM
Rainer
8,058
John Cain
Broker Associate
Keller Williams Realty of Newport
And the debate lives on...open house or no open house.  I personally have had success with open houses from either a buyer walking through the door or even a possible future seller.  Sure, most times they don't turn into anything but it's certainly worth a shot.  You'll meet the curious neighbors and if you're lucky make some new friends.  It's not too hard to timeblock just 2-3 hours a week for 1 open house if you don't have any weekend appointments already set up. I know an agent who received a call from a buyer who evenutally did buy a house just a few weeks later.  The agent asked how they had heard of him and it turned out they had stopped by an open house 5 years earlier!
October 18, 2007 04:19 PM
Anonymous #80
Anonymous
RenoPat

There are numerous ways to market a property - open house being one of them.  When I have a new listing, I do two Open Houses.  The first is one held for the neighbors.  I send/give them an invitation to an Open House held just for them.  Not open to the public.  Usually held on a Saturday afternoon.  From those neighbors, I learn more about the neighborhood and usually something about the house I am selling.  It gives the neighbors a chance to meet and visit with one another.  At these open houses, I remind them this is their opportunity to pick their new neighbor.  I give them marketing materials - bookmarks, flyers, etc. to take with them and, hopefully, distribute.  Then the next day, Sunday, I host an open house for the public.  Sure sometimes I have no visitors and sometimes only a few.  But, then it only takes one person to purchase.  When there are no visitors, I always bring things to do, always these are real estate related.  I would not want someone to come thru the door and find me reading "People Magazine".  I take this down time to write keep in touch notes to past clients, send thank you notes, or make to-do lists.  I will continue to do open houses because it is a visible marketing tool to the Seller.  If no one comes, then the Seller is aware the agent tried with no response from the public.   I always provide at least bottled water at open houses, usually more, especially if around a holiday. Yes, the open house costs can get up there, but, in my opinion, these costs are minimized  by the potential for future business.

Pat in Reno, Nevada    www.patriciajewett.com

October 18, 2007 04:41 PM
Rainer
3,232
Linda Liu

Hi, Pat, I agree with you. A lot of agents give up the open house for many reasons. There is a so called top agent in our market and he advertised on radio says "if you are a seller wants me to do a lonely Sunday open house for you, I am not the agent for you....then he goes he uses the market proven tech to sell your home quick.....etc."

I am a person who believe the basics. I also believe we are in the business pick our own clients to work with. I don't take every listing. But if I take a listing I will work hard and work smart to get that listing sold. Some suggestings to do in the open house 2 to 3 hours time:

1. Meet your potential buyer or seller and always let them fill out the registration.  Email is a must.

2.Give somethig free at the open house: Lottery tickets, refreshment, water, and your business card.

3. Chat with neighbors. They could be your potential sellers!

4. Bring your Laptop computer if you have one. You can put a new listing in, send emails to follow up, or even wirte a nice blog on AR to gain you some points.

Oh, boy! Is it 5 pm up?

October 18, 2007 06:42 PM
Rainer
7,629
Kevin McLaughlin
S&P Mortgage (Alumni)
Linda, you have some great points in your response.  It seems in my area that the realtors are scaling back from 2 hours to 1.5 hours.  Several realtors then run off to the next open house.  As a loan officer I try to hit the local opens every other Sunday.  It's a great opportunity to meet the people needing my services and also to answer questions.  I do find that many lookers don't want to give much information and desire to stay under the radar
October 18, 2007 06:56 PM
Rainer
35,981
Aaron Gordon
Home Loan Consultant - Las Vegas, NV
Home Loan Consultant

That's an interesting theory, Troy.  But I agree.  Most successful agents I know would tell you its part of the job.

That is a very successful open house, Toby!   I will go back to my marketing analogies because they are what I know best.   I once joined a golf club and knew many of the members. 

I had just come off a marketing campaign that was very successful for me where I did a free mortgage check up for all of my previous clients.   The response was incredible.   So I offered the same free mortgage check up to the 800 members of my golf club.   This campaign cost a lot.  I did not get one response.   Marketing is hit and miss unless you only focus on permission based marketing which is blog for another time.

October 18, 2007 07:12 PM
Rainer
35,981
Aaron Gordon
Home Loan Consultant - Las Vegas, NV
Home Loan Consultant

Back to basics is the theme today, Brian.  I have a close friend of mine who was a successful mortgage broker who does nearly all refi business.    He got in the game when the market was hot.  Well, today, his business is dried up and he is dying.  I am coaching him on how to get some purchase business and we are starting with lesson one even though he has five years expereince.

I appreciate your commentary nonetheless Kurt.   I don't disagree with you.  It takes a well rounded comprehensive strategy.  It sounds like you have an amazing agent who did that much work for you.   I hope you signed an exclusive buyer's agreement with her because it sounds like she has certainly earned it.  Hard work pays dividends.  Always has.

I don't think we are so technologically driven yet Bruce to where many sellers don't expect an open house on occassion.  I am not sure I would ever be brave enough in a listing appointment to say I absolutely dont do them.   That would definitely open the door to the competition, like you, who does them.

October 18, 2007 07:19 PM
Rainer
7,629
Kevin McLaughlin
S&P Mortgage (Alumni)

I like Kathy's theory about the lunch hour blitz.  Anything you can do differently than the competition is great!  Think about the folks who don't work and can come out b/c the kids are now in school.  On the weekends it's tough dragging those little angels around from one open to another.  In a community near my home, they do not do open houses b/c of the rural setting.  However, this spring and at the end of the summer, all the agencies got together and had opens in the same area.  They all served snacks and some had beverages.  It was like a block party.  Again, do something different to get differnt results

October 18, 2007 07:22 PM
Rainer
35,981
Aaron Gordon
Home Loan Consultant - Las Vegas, NV
Home Loan Consultant

Simon, I will definitely check that out.  Quite a debate has been sparked here.  I would never have guessed it when I wrote this.  I may have to make it the topic of my local newsletter.

You hit the nail right on the head, Mary!!!  I am pretty shocked at the agents who say "I put up a sign, I put an ad in Sunday's paper, and I can't believe no one showed up."   Based on my background, I would be shocked if anyone did show up.  Any event where you want people to come needs to be advertised in advance to the target market you seek.  

Let's say I have a listing in Section 9 of Podunk, Miss and I am planning an open house for Sunday Nov. 19.   

Now lets say I know that Section 9 is popular for people moving up the street from Section 8, does it make sense for me to put an small classified ad to the whole town in the paper on Sunday November 19 only and throw up a sign on the corner?   Or does it make more sense to do a comprehensive marketing plan to farm Section 8 in the weeks prior with info about this home, then stats on the neighborhood and schools, and finally a special invitation to attend?  I bet it would be cheaper than the ad and so much more effective.

We all get so caught up in "not wanting to lose anyone" than target marketing.  From experience, I can tell you that target marketinig is much more effective.

Its better to take an ad out in the LA Times that says you are the best agent in Marina Del Rey than you are the best agent is Los Angeles.  You will get way more calls.  And the same can be said city by city, town by town.

 

October 18, 2007 07:31 PM
Rainer
35,981
Aaron Gordon
Home Loan Consultant - Las Vegas, NV
Home Loan Consultant

Like all marketing, John, the goal of a great marketing strategy is to get business, not get business today.  Of your expectation is that marketing must pay off quickly, you will be disappointed quite often.

Those are awesome ideas Pat.  I would love to see the data on how much you have earned from these dual open house vs. what you have spent.  I would imagine you are way ahead.

Keep in mind, many companies believe that you are not effectively marketing the growth of your business if you don't spend at least 20-30% of your gross on marketing.   Is anyone in our business even coming close to this and failing?

I love the top 5 tips, Linda!  I have written them down to share with others.

Finally, another loan officer chimes in Kevin!!   I cannot tell you how many new loan officers say, "Aaron is it a good idea to go to real estate offices and bring in donuts? Will that get me deals?"  

Forget the surprise office visit.  The best agents don't spend a lot of time in their offices.   Take the donuts to an open house.

If you want to get in the purchase game and meet agents, the first step is to get out to the open houses and start hanging with some of these great agents who care about their business and will appreciate you showing up. 

In fact, because of the response of this blog, I am going to follow my own advice and head out to a few next weekend just to thank those that are still doing it here in Vegas.

October 18, 2007 07:43 PM
Rainer
27,774
Darrel Quebedeaux
Evergreen Realty & Associates Inc.
i love open houses.  As a buyers agent I do not take listings so I work opens for other agents and I try for two every weekend.  I do manage to connect with buyers and over the past few weeks the total trafic count is up.  So I am bullish on them.
October 19, 2007 02:14 AM
Rainer
75,661
Steve Heydel
30% Referral Paid to AR Members
United Country Walker Real Estate & Auction

I'm kinda in a rush at the moment or I would do this more in-depth, but there have been several good articles on open houses on Broker Agent News and here at AR.

The thing you have to accept is that open houses rarely result in selling that house--the open house is really more an opportunity for the Realtor to network. And, like so much in today's market, doing open houses the "old' way of putting an ad in the newspaper and a sign at the end of the road simply will not cut it.

Just a few idea:

*Pick the house you want to host a couple of weeks before hand, go to the tax records and download the addresses and names of all the homeowners in the neighborhood. Using this and, if appropriate, your SOI list, send them a postcard through www.expresscopy.com or some other postcard manufacturer.

*Host the open house at an unusual time--Saturdays or such.

*Have small drinks there.

*Bring your laptop (wifi, hopefully) and be prepared with a lot of information about not only the home's neighborhood, but similar homes on the market. Any lookers you receive might not buy THAT house in THAT neighborhood, but they might be interested elsewhere.

*With your laptop, have a good PowerPoint presentation about real estate.

*Probably most important, advertise your website to any and all visitors as a resource for their homebuying needs.

In other words, do something DIFFERENT. Create some excitement about your open houses. Don't simply put an ad in the paper and a sign at the end of the street (though why someone would put an ad in the paper any more is beyond me......).

October 19, 2007 11:34 AM
Anonymous #90
Anonymous
Kevin Scott Usher
As with most things that we do in our business. it is definitely regional, but as with anything we do in life we are the one held responsible for the outcome.  You can do an open house every weekend 6 hrs if you like and if how you hold them is just by spending alot of money putting signs up going in the home shuting the door behind you turning on the t.v. and basically just hanging out no they are not going to be productive. try not running the add put some signs out bring some usefull info a good attitude. leave the door open and hang out on the front porch basically inviting passer-bys in with a wave hello and a smile you will probably have a bit more traffic and probably meet a friend. Most folks feel weird just walking up to a closed home when they don't see any one outside. Being a new agent all of my sales have been from open houses and not all of them have had a bunch of traffic. you just have to make the best out of the traffic you do get.        Have an Awesome weekend
October 19, 2007 11:41 AM
Rainmaker
276,010
Kelley Eling
Marin County, CA Real Estate
Marin Modern Real Estate
I have tried organizing "Neighborhood Showcases" with other agents with listings in the same neighborhoods as mine and I could not get them off the ground.  And, believe me, I thought of some really great stuff to get potential buyers and out of area agents to this community with a large second home and retirement population. 
October 19, 2007 01:49 PM
Rainmaker
289,811
Kate Bourland
Onlilne Marketing Mobile Marketing
Marketing with Kate
I too notice very few open houses in my area.  I drive around looking for them on weekends and can't find any.  It's crazy.  Those agents that go back to the basics are the ones that will survive this market!
October 19, 2007 03:40 PM
Rainer
4,948
Rick Davis
MN Real Estate & Mortgage Source
American Pride

My opinion is this:

I think alot of realtors have bad attitudes right now.  If they think no one will come they won't.  I think you need to put out a lot of signs and advertise well in advance.  I know realtors that put out up to 50 signs for open house and get a good turn out.

I alos think alot realtors remember when the markets were good when they didn't have to do open houses so they won't do them now.

 

October 19, 2007 04:12 PM
Rainer
20,928
Beth Anderson
Realtor - Tecumseh / Lenawee County
Goedert Real Estate
Our area still holds many Open Houses each week.  We all accept that the Open House rarely sells the home, but sellers like them and we do pick up buyers now and then.  I think I only have had one closing this year as a direct result of an Open House, but every closing puts a smile on my face and when I break down the two hours, every other week or so, it's not a bad per hour return.  I was listing a home this Summer and I was telling the seller and his girlfriend (who was also considering putting her home on the market) about how we can do Open Houses, but that it is rare to get a buyer that way.  Funny thing was they both told me that they had each purchased their homes directly from seeing them during Open Houses.  You never know:)
October 20, 2007 05:05 PM
Rainmaker
573,777
Terry & Bonnie Westbrook
Westbrook Realty - Grand Rapids Forest Hills MI Re
Westbrook Realty Broker-Owner

Aaron, I haven't read all the comments on your blog but I will refer you to the blog article I wrote on 10-8-07 for AR titles Is holding open houses worthwhile?

 I have had 2 more weekends of open houses since I wrote this and I have sold and closed another listing from an open house. Oh, yeah, and it was my sale, too.  I figure I am currently at  about $300 per hour even though no one showed up this past weekend. (It was a gorgeous day for Michigan)  I am not bragging. I did this exercise because I was wondering, is this really a good use of my time?

Now, we are not exactly having a booming market here either. It is plugging along at our normal pace, we just have lots and lots of listings, FSBOs, and foreclosures on the market along with our marketable listings.

 Sooo, a big NO, open houses are not dead! 

Service your clients and hold open houses is my unsolicited advice

October 23, 2007 08:16 PM
Rainer
15,360
Carlos Scarpero
Internet Marketing Consultant
Dayton SEO Services

Maybe it's because people aren't showing up. My neighbor just did one and they didn't have a single person come and look at it. Not one!

Ok, I did stop by but that doesn't count as I just went over to try to sell the Realtor on my internet based greeting card service that I sell. I had plenty of time to make a great presentation!

October 24, 2007 12:14 AM
Anonymous #97
Anonymous
Jeremy

Hey Aaron

I appreciate your open access, tips and generally positive attitude. Lending here in the Seattle area is a positive experience at present and we hope it stays that way. The issue of increasing home's for sale inventories...where do you think that will take us?

Jeremy in Seattle

October 24, 2007 11:41 AM
Anonymous
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Rainer
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Aaron Gordon

Home Loan Consultant - Las Vegas, NV
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