Open Houses: A Saga – Post #2
What is an open house? Well, I’m glad you asked. According to Merriam-Webster, it’s the following:
“1: ready and usually informal hospitality or entertainment for all comers
2: a house or apartment open for inspection especially by prospective buyers or tenants”
This series of blog articles will cover several different aspects of Open Houses but it will mostly be covered from the real estate agent’s perspective, as that’s the most technical perspective there could possibly be toward an Open House. If you are a buyer and not licensed to sell real estate and are looking for information on open houses, you can find more information in this series than you ever wanted.
I have broken it out into multiple sections and posts, and they are as follows:
- Blog Post #1: READ HERE
- Section 1. Open House Strategy
- Open House Checklist
- Blog Post #2:
- Section 2. Open House Selection
- Section 3. Open House Preparation
- Blog Post #3: COMING SOON!
- Section 4. The Day of the Open House…
- Section 5. Conclusion
Section 2. Open House Selection
Selection of the right house to hold open
The selection of an open house should not be a random “point at the map and show up kind of event”. One of the main reasons for doing an open house is to obtain prospects. It’s obviously to try and sell the house and make the seller happy. But, according to NAR, only 3-5% of homes sell directly as a result of holding an open house. That’s a number that we should know, as it is helpful to be able to express that kind of knowledge to a seller. But it’s not a number that should bother us.
One of the biggest reasons for doing an open house is to obtain prospects; meaning potential clients. They could be sellers or buyers. If you are inviting the neighbors and they see you working hard for their neighbor, they are going to keep you in mind as a potential agent to call if they decide to list their house. If someone shows up to your open house as a potential buyer, are they buying or renting? Do they need to sell their house before they can buy the one you’re doing an open house on? If they are looking for an agent, have they been impressed with what they have seen at your open house?
Preparation is important and selection is an important part of that preparation. If an agent is trying to obtain prospects by holding an open house, then they will want the open house to be strategically chosen. What does that mean, strategically chosen? It means that an open house first needs to be in an area where people are. Most likely, it will need to be in an established, growing, or popular neighborhood or area. Traffic is what you should be looking for. A popular area is one way to increase that traffic. Another way to increase traffic is a popular price point.
Everyone would like to sell a $1,000,000 house but how many people in your market can afford a $1,000,000 house? You might get a lot of traffic but how many of them are there to actually consider purchasing that house or a house in that price range and how many people are there just because they’re interested in what a house that expensive looks like?
So, the thing to remember when selecting which house to hold open is TRAFFIC. Geographic access and market segment have a lot to do with an agent’s potential success from an open house. Whether it be on your listing or a fellow associate who did not have time to hold their own listing open and has given you permission to hold it open for them, the house being held open needs to be reasonably accessible and attainable.
Section 3. Open House Preparation
Activities prior to an open house
As you might have seen in the checklist, time spent on a successful open house does not start on the day of the open house. Obviously, there is the time going into the research for the selection of an open house, but then there’s the rest of the activities that go into preparing for the open house itself.
Submitting ads in the newspaper or online, running a CMA and printouts of other active listings in the neighborhood, previewing active listings if possible, being prepared to show other homes if the Open House does not fit the buyer’s needs, preparing feature sheets with your contact info (do not leave these at the listing if it is not your listing), setting out announcement signs (“Open Sunday 2-5”), making sure there are an adequate number of directional signs put out, collecting any items you might need for the open house (i.e. flags, feature sheet, sign in sheets, etc.), inviting neighbors with the 5/5/10 rule (where you invited the 5 neighbors left of the open house, 5 neighbors right of the open house, and the 10 neighbors across the street), contacting sellers a day or two prior to the open house to confirm that you are coming and that they are expecting you (or listing agent if not your listing), collecting other work materials (i.e. paperwork, contracts, COI list, etc.), and anything else you would like to do. Or that your broker would like to do.