Houses Under Fifty Thousand

Open House

Should you have an open house?

I remember the first open house I hosted. I was a new real estate agent, and knew nothing about the home - it was listed by another agent in the office. It was a lakefront home, which was too expensive for most of the visitors who came that day. They came to dream. Their kids came to run around the yard, getting in the seller's things. I ran around trying to keep track of where everyone was. I didn't sell the house.

This was okay, my office manager told me. It all went as planned. I had the names and phone numbers of several prospective buyers who had signed in at the open house. I even knew what some of them wanted in a home, so I might possibly sell them something.

Here is the truth: an open house is a prospecting tool for the agent, not a great way to sell your home. Many experienced agents won't even host their own open houses. They just get a newer agent to host it. I did this many times as a new real estate agent.

Think about this for a moment. The listing agent could be there, and keep more of the commission if the home sold. If the hosting agent sells the home, he gives up half of his commission. Would he take that risk if homes were commonly sold from open houses?

Why should you let dozens of people who aren't qualified to buy your home track their muddy feet through it then? Maybe you shouldn't. Whatever the agent may tell you (and yes, there is a chance you'll sell the home from an open house), he suggests it for two primary reasons:

1. To show he's doing everything he can to sell your home - effective or not.

2. To use it as a prospecting tool for himself, or for the hosting agent and the broker.

A couple dozen couples looking for a new home will be signing in with their phone numbers. Now that's an opportunity - just not for you. The point is to collect a list of buyers. Most of these are looking for homes that are nothing like yours. It isn't expected that the agent will sell your house in the process. I hosted many open houses when I started selling real estate, and I didn't sell one of them that way.

Of course, it can happen. Any additional exposure can increase the odds of selling your home - by a little bit. But remember that this is more effective as a prospecting tool for the agent than as a tool for selling your home. It may or may not be worth the trouble for you, for the small chance that it will help.

What if you do have a open house? Hide the valuables - an agent can't watch the visitors all the time. Put easily-broken things away - parents may bring kids. Write a list of answers to the most likely questions about your house - and give it to the hosting agent. Maybe it is also fair to leave a hidden camera running to see what really happens at the open house.