Agents admit that few sales come from open houses.
Now the Internet is making them even less valuable
Selling Real Estate
By Melinda Fulmer
Because they know that the time spent at an open house is probably not going to lead to a sale, real estate professionals approach
open houses like unpaid baby sitting-if the seller really wants one, they'll do it to appease the client. Ironically, the agent's
real motivation might have nothing to do with selling your house at all. 75 percent of the agents in a new study said they use
open houses to find new clients. In that study of Texas realtors conducted by Texas A&M University
Los Angeles real estate agent Liz Johnson loves open houses, but not because they move her properties. The real reason
Johnson holds them is because they bring her more business.
Prospective home buyers walk through and ask what other listings she has. "They've always been better for agents
than sellers," she says.
The proliferation of Internet listings and other online real estate information is quickly making open houses more
of an option, rather than a requirement for selling a home. In 1995, just 2% of home buyers used the Internet to look
for a home, according to the
National Association of Realtors. Last year, 77% of home buyers shopped online.
Indeed, only 2% to 4% of Johnson's listings sell from open houses. "It's not a necessity," she says.
Agents, sellers question effectiveness
For the most part, Johnson, an agent with Dilbeck Realtors and a 25-year veteran of the real estate business, doesn't
hold open houses for her listings unless sellers press the issue. Most of her sales come from her contacts with other
agents and from the multiple listing service, she says.
Many agents now refuse to hold open houses, considering them a waste of time and a security threat. And many sellers
now prefer to open their doors to serious buyers only.
"They're not effective," says Daniel Fellars, a 29-year-old software engineer from the San Diego suburb of
San Marcos, Calif., who recently put his four-bedroom, two-and-a-half-bath home on the market. A series of open
houses did little to move Fellars' former house, which sold about a year ago. "We had an open house five weeks in a row
and never got a single person to come to our house," he says.
This time around, Fellars has decided to forgo scheduled open houses and simply give potential buyers private tours
of his house as needed. He has posted 30 pictures on his home blog,
linking it to Google, Craigslist and
other popular Web sites. In the next week, he will add a
video tour, showing every nook and cranny of the house, much
as an agent would.
So far, the blog has brought in about 20 interested buyers, but he has received no offers. Fellars says he knows
he faces an uphill battle, given the slowing housing market and the other four houses for sale on his street. But a few
of Fellars' neighbors recently had open houses and he says, "I haven't seen any cars in their driveways."
Open and shut
Consumer sentiment about open houses has waxed and waned over the years, along with the ups and downs of the
real estate market. In 1995, 41% of buyers surveyed relied on open houses to sell their home, according to data from
the NAR. By 2000, it had dropped to 28%. Beginning in 2003, however, as the market started to heat up again, that number
began rising. By 2005, the last year for which data is available, 51% of all sellers were using open houses, though
not all agreed they were effective. Some 45% of sellers found open houses only "somewhat useful" and another 12%
didn't consider them useful at all, according to the NAR.
"Many sellers are just a little bit leery of having an open house," says Pat Vredevoogd, agent and broker-owner of
AJS Realty in Grand Rapids, Mich., and incoming NAR president.
Some, she says, are worried about letting complete strangers roam freely through their house, with access to
electronics, jewelry, prescription drugs and personal information.
Others just don't want their neighbors and a host of other so-called "looky-loos" wasting their time just for a
look at their décor.
And many agents won't do them for security reasons, as a number of their fellow
Realtors have been attacked and some
even killed, as they sat in an empty house alone and vulnerable.
Vredevoogd, herself, isn't keen on them. While they have proved helpful over the years on some of her more
listings, most didn't produce a sale. "Over the past year, maybe two or three of the 50 houses I sold were from an open
house," she says. "Personally, I think it's a waste of time. It's one of those things that has gone by the wayside."
Before jumping into an open house, Vredevoogd counsels her clients to put the house up on the local MLS and other
Web sites, with a lot of pictures and perhaps a virtual tour if the home has a lot of nice features. She sends out a
barrage of e-mails to other agents and makes some calls. If the house isn't getting a lot of interest, only then will
she go through with an open house.
Online house hunting
"There's no doubt about it, the Web is changing real estate," says Colby Sambrotto, chief operating officer
While his site, which lists about 100,000 homes a year, gives people the tools to hold and advertise an open house, he thinks more
of the browsing is now done online.
Home buyers, he says, don't want to spend a day in the car with a Realtor like they did in years past. Many people
want to spend an hour or less, and zip out on their lunch break to see a house.
While this may inconvenience sellers, who have to show their house more often, Sambrotto says it's worthwhile
because these parties are more serious. "They're not looky-loos," he says. "They've done their research."
When open houses still make sense
There are times, says broker Greg Meer, Sr. of Keller Williams Realty in Las Vegas, when an open house is
not practical at all, such as if a house is off the beaten path, or in a
gated community. Likewise, it might be best to
avoid an open house on a shabby listing or one that requires a lot of work. It probably won't get much traffic, he says,
and agents will be reluctant to have their name advertised heavily in association with it.
But an open house can be a valuable opportunity to get feedback about what is and isn’t attractive about a house,
Meer says. He cautions buyers against holding them too often, however. "It can send a signal that (a house) is a
little bit market worn and a tough property to move."
In Meer's opinion, an open house is only worth having if it's done properly. That involves
sprucing up the house and
its landscaping and advertising it well in advance. "Over the past couple of years, people got spoiled by being able
to throw up a sign and get lots of traffic," he says.
Nationwide, home sales are expected to drop 6% this year, and sellers in many markets are already dropping their
prices. That may prompt more agents to turn to open houses as a last-ditch effort, Vredevoogd says, after years of
avoiding them. "In a buyer's market, if you are a seller you want to try everything."
In many markets, that includes hiring a professional stager to make your home look brand new, or at the very
least, tastefully appointed. Gail Mayhugh, a professional home stager and owner of GMJ Interiors in Las Vegas, said
she has seen an uptick in her business as the once-hot housing market has cooled.
"All of a sudden the agents are calling me for open houses," she says, and many are willing to spend part of
their commission to make their property stand out. "There were 19 of the same floor plans for sale in one
neighborhood," she recalls.
And while open houses may be declining in many parts of the country, some neighborhoods are finding them effective
ways to raise the profile of an entire community, if they are all done at the same time. Recently, four neighborhoods
in the Grandmont Rosedale area of Detroit teamed up for a joint open house with 35 of the area's homes open for
viewing on a single day. And developers in Long Beach, Calif., showed 2,300 housing units in that city's downtown
on May 20, in an attempt to stimulate sales.
5 questions to ask before holding an open house
Not sure whether your home might benefit from an open house?
Here's how to decide.
By Melinda Fulmer
1. Is your house in a high-traffic area? While many are advertised in the newspaper, on the Internet
and in fliers, it's still drive-by and foot traffic that brings most open-house visitors. Amanda Staines, a sales
director from Atlanta and a former agent, says she plans to hold an open house every weekend until her newly renovated
two-bedroom townhome sells. The reason? "Location, location, location. My house is off a major road, so the signage can
really pull" people in, she says.
2. Does it have special features or was it recently renovated? An
especially beautiful house can make buyers out of the most casual visitors.
3. What's your home's sale price? Many real estate agents say they no longer hold open houses for
high-end homes, because they consider them a draw for thieves and gawkers. They prefer to schedule private tours.
4. How much time and money am I willing to invest in an open house? In some markets, much of the
competition is using stagers and investing in costly upgrades such as painting and landscaping. If you aren't
willing to spruce things up, an open house might not be worth it.
5. Is my real estate agent behind the idea?
If they don't think it's a good idea for your home, or are
unenthusiastic about it, it might not do much for you.
5 tips for a better open house
If you're committed to holding an open house, here's how to do
By Melinda Fulmer
Holding an Open House
1. Clean and repair your home
. It should go without saying, but clean your house as if you were going to
eat off the floors. Also, consider making minor cosmetic repairs and upgrades such as touching up paint and planting
2. De-clutter. Put away the ceramics collection, toys and things lining the
bathroom and kitchen counters. A
crowded house makes it look smaller and makes it harder for buyers to imagine it as their own, says Gail Mayhugh, a
professional home stager and owner of GMJ Interiors in Las Vegas.
3. De-personalize. Take down family photos, trophies and other personal touches, even that book
on your nightstand. Buyers need to imagine the house as a blank slate, ready to be occupied and personalized by them, Mayhugh says.
4. Consider holding an early viewing just for the locals. For instance, if you are having an open
house from 1 p.m. to 4 p.m., invite your neighbors from noon to 1 p.m. It will make them feel good and allow the
agent to focus on the most interested parties when the real open house starts.
5. Promote heavily. Make sure your open house is listed on the MLS and on other Internet
sites such as Realtor.com,
Post lots of pictures, send out fliers, put up lots of signs and advertise in your local paper.
What to do
What to do if your home isn't selling
From rethinking your color scheme to holding open houses on weeknights, here are 10 tips for sparking interest in your home.
By Sally Anderson
prospective buyers with their real estate agent
Whether you're in a bone-dry market or a sizzling selling season, if you haven't received any offers on your home
you're probably facing the question of whether to take it off the market. A house that goes too long without selling
begins to appear "stale" and can actually damage your future chances of a sale.
How long is too long? It's not an exact science, but there are some helpful indicators. In a dry
market, a sales period of six months to one year isn't unusual. Look at recent sales reports of similar homes
nearby to determine a reasonable selling interval. In a hot seller's market, a house that hasn't sold within one month
indicates a problem. In either case, there are several steps you can take before putting up the white flag.
10 tips to improve your selling karma
- Videotape your house, inside and out, and watch the tape as if you were a prospective buyer. Is the lawn weedy
or the garden bare? Is your home uncluttered and spotlessly scrubbed? Sparkling-clean houses sell faster than
those that look too lived-in or show an abundance of the owner's personality.
- Take a second look at your listing price. Visit open houses in your neighborhood.
Are similar homes priced lower? Selling prices may have dropped since your first
comparative market analysis. In a hot market, if you haven't sold your home
within one month, chances are good that you've overpriced it. If you do lower your asking price, consider a figure
slightly below those of other comparable homes if you are interested in a speedy sale.
- Do whatever it takes to be away from your home during showings and open houses. The presence of sellers
makes it difficult for prospective buyers to take their time or talk openly with their partner and agent. Leave
some treats out to make potential buyers more comfortable: beverages, nuts, cookies -- anything that won't lose freshness or be too messy.
- Ask your listing agent to talk to buyer agents in
his or her firm who have shown your home. The feedback from their clients can guide
you in making home repairs, toning down your décor, making landscaping improvements and the like.
- Hold an open house on a weeknight. Competition is lower, and you'll attract the interest of buyers who can't
make weekend appointments because of other commitments. (Read more on whether an open house makes sense for your
- Take out some extra online ads or print ads, even if your agent is doing a good job with promotions. Look
for out-of-the-ordinary places to advertise, such as trade magazines, company newsletters and other alternative
resources. You can even offer perks to buyers, such as a cash bonus or a season ski pass.
- Neutralize your color scheme. Most buyers prefer pale, neutral colors that make it easier to imagine a new home
as their own. Houses with white exteriors are the highest sellers; for interiors, try whites, off-whites or pale
grays. (Read more tips on preparing for an open house here.)
- If you've had offers but you considered them too "lowball," try readjusting your sights. Determine
the lowest price you find acceptable, and consider anything more as icing on the cake. In a longstanding dry market
you may even have to sell at a loss, so it's important to take every offer seriously. You don't want to alienate a
potential buyer who has solid financing because you've set your sights unrealistically high.
- Is your listing agent giving your house adequate attention? If not, start by having a candid talk. If there's
no change, discuss the problem with the firm's broker. As a last resort, wait until your listing agreement expires
and find an agent with a proven track record in your area. On the other hand, if you have a
fabulous agent but the market is underwater, consider offering an increased commission or a bonus for your
listing agent as extra incentive. If you do sweeten the pot for
your agent, amend your listing contract to reflect the change, and be sure it's added to the Multiple Listing
Service (MLS) -- buyer agents will also be inspired to give your house extra attention.
- Relist your house to give it a kick-start. When it was listed on the MLS, it was assigned a number reflecting
the date and year of the listing. By now it may appear outdated to buyer agents; relisting will provide you with a
new number. Check into the policies of your local MLS: You may need to make a change to qualify for relisting,
such as temporarily taking your home off the market, adjusting its price or changing listing agents or firms.
(Note: this is no longer possible with our Metrolist MLS System).
Taking your house off the market
If you've tried the tips above, you're confident that your asking price is competitive, you have an ace agent and
you're still not getting any action, it's probably time to take your house off the market. Here are some ways to
make the most of it:
Choose your selling season. If you can afford to do so, relist during a more dependable selling
season. After warming up in late winter, the market typically starts to peak from the ides of April (yep, tax
season makes a difference) until June, when longer days and splashes of garden color make homes look their best. In
summer, the market slows to a crawl, followed by a second peak from September to Thanksgiving. From then until
January, the market tends to be as cold as a Midwestern winter, but it can also be advantageous to list while the
competition is sleeping. Research the trends in your area: If you live near a winter resort, for example, winter
may be the savviest time to sell.
If you're a senior, consider a reverse mortgage. Designed to help seniors who have more home equity
than they do cash, a reverse mortgage is a loan against your home. The money is disbursed as either a single payment
or a monthly sum, and the loan comes due (with interest, of course) only when the house is sold or upon the death of
the owner. (Read more about the special issues facing seniors selling their homes
Rent out your home until the market bounces back. If you must leave your home because of a job
transfer or other extenuating circumstance, renting is an excellent option as you wait for the market to regain
some heat. If you don't have the time or the talent it takes to be a good landlord, contact a reputable company
that specializes in screening applicants and managing properties.