Open Houses That Work
Open Houses That Work
It’s a never-ending debate that has become more heated in recent years. Do open houses provide any real value as buyers spend more of their house hunting time online?
Some practitioners dismiss the open house, saying it’s an outdated custom that’s carried on mainly to placate home sellers. Other real estate pros remain devoted to the method. Their track records show that open houses can, and often do, get the property sold.
Even when a Sunday afternoon buyer doesn’t emerge, the open house serves as a prospecting opportunity, a way to fill their pipeline with future business.
"I treat Sunday as the most important day of the week," says Wendy Cutrufelli, a sales associate at Alain Pinel, REALTORS®, in Walnut Creek, Calif. "When else will you be in a room full of buyers and sellers? You spend a lot of marketing dollars to reach these people, and open houses put you right in front of them."
As Cutrufelli and other open-house enthusiasts can attest, orchestrating a great event isn’t easy. From getting people to show up to following up after the event, every open house requires careful prep work, excellent conversational skills, and a positive attitude.
"It’s not a two-hour picnic," says Rita Burke, e-PRO®, broker associate at Kenna Real Estate in Denver. Burke estimates that she and her husband Brian Burke, e-PRO®, the company’s managing broker, spend about 12 hours on every open house. That includes online marketing, printing and assembling packets of information for attendees, placing signs around the house, and hosting the actual event. "It’s a full day of work," she says, "but we do it because we believe in it and we have success with it."
Harness the Web
If you’re looking for greater success in the open house arena, the first thing you need to know is how to get prospective buyers to show up. One of the best ways to attract people, Cutrufelli says, is by promoting the open house as widely as you can and as early as possible in the place where most buyers are lurking—on the Web.
She starts planning her Sunday open houses a week in advance. Her goal is to have three open houses per month, so if she doesn’t have a listing of her own that she’ll be holding open, she sends an e-mail to her entire office Monday morning, asking if she can host someone else’s. "I’ve never not gotten one when I’ve wanted one," she says.
By Wednesday, she usually knows which property she’ll be featuring, and she posts the information on REALTOR.com, Trulia, Zillow, and the multiple listing service. (If it’s not her listing, the listing agent must post the information on the MLS.)
"It’s interesting to see the increase in clicks to your listings after you’ve started promoting the open house," she says.
Following a checklist of marketing activities, she also blogs and tweets about the upcoming event. She estimates that about 50 percent of people who walk into her open houses learn about them through the Web.
"One of the first things I always ask people is: How did you find out about this open house?" she says. "The Internet is a huge driver today."
So-called "Internet buyers" tend to have done their homework on the property, but they’re less willing to give up personal information than a neighbor or someone who came in because they saw a sign, Cutrufelli says. "I approach them a little bit differently than other buyers," she says. "I know they value their anonymity. I ask open-ended questions and I don’t prompt them for a bunch of information right away."
When she eventually asks whether they’re working with a real estate agent, she finds that Internet buyers are more likely than other buyers to be unrepresented. If they’re not interested in the property at hand, Cutrufelli approaches them as prospects.
These buyers may require patience, but they will purchase in due time, she says. One couple Cutrufelli described as "classic Internet buyers" spent a year researching the market and nine months going to open houses unrepresented before they came to one of her events.
They agreed to meet with her again the next weekend, and eight months later they bought a house with her. Not all Internet prospects take quite that long, Cutrufelli notes, but in that case the buyers were dealing with excruciatingly tight inventory in their price range.
Signs, Signs, and More Signs
Rita and Brian Burke also rely on the Web to promote open houses in the Highlands Ranch community south of Denver. But the cornerstone of their marketing strategy is signs, and lots of them. Over the past three years they’ve amassed a collection of about 80 open house signs in an array of styles, colors, and sizes.
For a typical open house, Brian will spend two hours before the event setting up 20 to 40 signs. It may sound excessive, but "it really works," Rita says. "It brings the people in."
They use a mix of company-branded signs and specialty signs, which advertise giveaways ranging from fresh-brewed coffee to a list of area foreclosures.
"Different signs work for different properties," she says.
For example, they found that a no-frills handwritten open house sign is very effective for drawing in bargain hunters, even though the signs may look tacky. For higher-end properties, company-branded lime green-and-navy signs paired with just a few specialty signs have proven to be a good mix.
"We do work with a lot of homeowner associations and gated communities, so in those cases we may have some restrictions on what signs we use," she says.
Signs will often attract curious passersby who may not be actively looking for a home. But that’s the point, Rita says.
"You never know who will fall in love with the house," she says. "We don’t disregard anyone. The bottom line is that we need a buyer, and the looker may be the buyer."
It’s hard to argue with the Burkes’ success. Rita estimates that 10 percent of the couple’s listings sell to someone who visited an open house. But of course, a home doesn’t sell just because of the signs. The clincher for many, she says, is Brian’s gift of gab.
"It’s really his personality that gets people warmed up," she says. "Once you get them in the door, it’s the way that you conduct the open house that makes the difference. If you come right at them with ‘Are you qualified?’ they’ll run away."
Brian, who has a background in construction, loves walking visitors around a property and chatting about a home’s details. Even if visitors don’t fall in love with that particular home, they’ll leave with the thick packet of community information that Rita assembled the day before. The packet includes a local market report with data on recent sales activity and selling prices.
"Our feeling is the bigger the packet, the better," she says.
Being Friendly Pays
Cutrufelli estimates that about 75 percent of her buyer business originates at open houses. She also provides a helpful giveaway—one that both buyers and her competitors appreciate. Before the event, she maps out all other open houses in the area, regardless of whether the homes are listed with her brokerage.
"Visitors love it, and it establishes a professional atmosphere with other agents," she says. "I’ve even received thank you calls from agents at other open houses who see my name on the map."
As part of her homework before each open house, Cutrufelli researches every other listing in the neighborhood that falls within the same price range and general specifications as the open house. In conversations with visitors, the information helps showcase her market expertise.
She says her main goal at every open house is to find a buyer for the home. But when it’s clear that the buyers are looking for something different, her helpful attitude is what makes the difference in winning clients. This is especially true when it comes to dealing with neighbors.
"Neighbors aren’t a waste of time," she says. "They’ll usually show up and say, ‘Oh, don’t mind me. I’m just a nosy neighbor.’ I tell them, ‘I love nosy neighbors!’ I let them know it’s OK that they’re there."
Rita Burke not only shares that philosophy, she distributes flyers to the 100 closest neighbors the day before an open house. "There are always people who are moving up or down but want to stay in the area," she says. She once sold a house to a neighbor’s friend who was relocating.
‘Don’t Just Stand There’
At Weichert, REALTORS®–Synergy in Wellesley Hills, Mass.—and throughout the Weichert franchise—open houses are deep-rooted in the company culture, says broker-owner Martin Kalisker, e-PRO®. Four of every seven homes sold by Weichert brokerages are bought by buyers who attended an open house, Kalisker says.
That’s why Weichert sales associates don’t question holding open houses. "They understand why we do them, how it helps sellers, and how it helps them develop relationships with their clients," he says.
Weichert practitioners hold multiple open houses for each of their listings, complete with eight bright yellow signs and 16 balloons per open house. They also accompany their buyer clients to other open houses. Even if buyers have already seen the home in a private showing, they’re urged to attend the open house.
"It’s a great tool to create a sense of urgency," Kalisker says. "It creates sort of a feeding frenzy. If your clients are interested and see that other people are interested too, it gets them off the fence."
Kalisker says his associates start planning open houses about two weeks in advance. Each event is staffed by the listing agent, a buyer’s agent (typically someone who’s newer to real estate), and a representative from one of the company’s preferred lenders.
The lender can answer financial questions and help buyers understand how a low interest rate makes the home more affordable.
Meanwhile, the buyer’s agent learns about buyer preferences and how an open house is done, Kalisker says.
Unless the seller objects, open houses are held every week or twice a month for each listing until the property sells.
"At the open house, our job is to market and sell this home. We try to develop a rapport with the people coming through and we answer their questions. We ask them what they like about the home and what they’re looking for. We don’t just stand there."
Although it may be off-putting to some visitors who don’t want to give any information, everyone is required to sign in, Kalisker says. "It’s a matter of procuring cause."
A successful open house, Kalisker says, is one that achieves "a broad exposure," bringing in serious buyers and neighbors who may know someone who wants to buy the house.
Postcards, e-mail blasts to people who’ve registered on the company’s Web site, and online marketing help spread the word.
"What’s most important to me is that we get the message out to the right potential buyers. If an open house visitor buys that house, we’ve done our job," he says.
Cara Pearlman, a sales consultant at Long & Foster Real Estate in Bethesda, Md., agrees with Kalisker.
"To be completely successful, the open house results in having an offer," she says. "Even if you have only three buyers through in two hours, if one of the buyers writes an offer, I am going to say it’s a successful open house."
Pearlman says her "secrets" to generating a lot of foot traffic are online marketing and smart pricing. But once the buyers show up, it’s important not to disappoint.
"A huge part of it is making sure the house shows the best that it can. We’ve had sellers move furniture out and even move themselves out when the home goes on the market," she says. "It becomes like their own little HGTV project." She sold three homes in the last year to buyers who first turned up at her open houses.
Find What Works
So before you say open houses don’t work, take a moment to consider the other side.
"There are people who say direct mail is dead or blogging doesn’t work," Rita Burke says. "The truth is that you have to find the method that works best for you. If you do an open house the right way, it will work."
Get More From Your Open Houses
Perhaps because of today’s more challenging market conditions, the percentage of recent sellers who say their agent held at least one open house rose over the past five years, to 59 percent in 2009 from 49 percent in 2004, according to research by the NATIONAL ASSOCIATION OF REALTORS®.
Find topics for your blog.
Treat open houses as a "fact-finding mission" to learn about the hot topics and concerns that are on buyers’ minds, says Wendy Cutrufelli of Alain Pinel, REALTORS®, in Walnut Creek, Calif. Then turn their questions into topics for blog posts, and include relevant information in your buyer presentations.
Get neighbors on your side.
When it comes to word-of-mouth marketing for your listings, nothing beats the power of knowledgeable neighbors. Invite neighbors to their own special preview event an hour before the house opens to the public, suggests Martin Kalisker of Weichert, REALTORS®–Synergy in Wellesley Hills, Mass.
Listen for feedback.
Want to know why a home isn’t selling? Ask people what they like about the property, but take special note of their objections to buying, says Rita Burke of Kenna Real Estate in Denver. Is the price too high? The backyard too small? Armed with the information, you’ll be able to tweak your marketing or work with the seller to fix what’s wrong.
Make them remember you.
For the most prospecting punch, provide buyers with something of value: a map of other open houses in the area, a list of local foreclosures, or a snapshot of recent market activity. Even after they’ve moved on, they’ll remember the helpful information you gave them.
Tips From the Open House Master
Recently we spent a day with open house master Margaret Rome, e-PRO®, broker-owner of Home Rome Realty in Baltimore. (Watch the video at REALTOR.org/masters.)
Some of Rome’s tips:
- Don’t have an open house just to have one. Not all homes are truly perfect for an open house, Rome says. "If the home isn’t in open-house condition, don’t have one unless you’re advertising it as an as-is property that needs tons of TLC."
- Add a personal touch. Prospective buyers can always expect a sweet treat at one of Rome’s open houses. She likes to bring a basket full of Baltimore’s famous Berger Cookies, a delight to adults and children alike.
- Give them a reason to come. "Sometimes you have to do something a little different from the three Ps—put it in the multiple list service, put a sign in the ground, and pray," Rome says. Consider having an event with a fun theme, such as ‘champagne and popcorn.’ Design an open house that guarantees people will show up."
- Keep your seller a phone call away. "You don’t want a seller who stays at home talking to the people who come through. That intimidates buyers. But the seller should be reachable during the open house in case a serious buyer has a question about the depth of the well or the age of the furnace."