RISMEDIA, Oct. 10, 2007-(MCT)-In his 16 years in the real estate business, broker John Hodnett has held only one open house.
“I don’t think I’ve ever lost a sale,” as a result, he said.
Hodnett, of Lila Delman Real Estate, acknowledges that many agents, including some in his own office, swear by open houses as an important and effective marketing tool. But “personally, I’m not a fan,” he said.
“You can talk to 100 real estate agents,” Hodnett said. “And 40 or 50 will tell you they’re a complete waste of time. It’s one of the most widely debated things in real estate.”
According to the National Association of Realtors, 80% of home buyers last year started their search on the Internet, up from only 2% in 1995. But 42% of buyers also went to open houses as part of their search process.
For buyers, open houses offer an opportunity to see properties in person and get a feel for the market without the pressure of working with a real estate agent. For sellers, just the act of scheduling the first open house can jump-start an effort to get a property market-ready by ridding the house of clutter and attending to small repairs.
The Internet, and the opportunity it gives buyers to get detailed information about properties through virtual tours, and even detailed floor plans online, has made the open house less relevant, Hodnett said.
It’s Hodnett’s view that “real buyers” call and make appointments to see properties, and open houses usually attract only the curious and unserious.
“You can go to an open house without crossing the threshold,” he said. “If you’re a real buyer, you’ll call.”
“I’m personally not convinced that me sitting in somebody’s house for three hours on a Sunday afternoon is the best use of my time.”
According to Len Iannuccilli, broker owner of RE/MAX Professionals in East Greenwich, only a tiny percentage of houses actually sell as a direct result of an open house. But they can lead to a sale on the second or third visit, he said.
“We’ve had a lot of success with the open houses,” Iannuccilli said. Although they can be “a bit of a pain and an inconvenience for that seller,” he said, there is always a chance that a buyer will drop by “and fall in love with it.”
Some buyers, even those who have looked at a property online, may want to make their first visit “without the pressure of an appointment,” Iannuccilli said.
“It’s that wildcard opportunity,” he said. “Granted, the odds are slim that that will happen, but it does happen.”
Like Hodnett, Iannuccilli said he has invested heavily in Internet marketing, most importantly, virtual tours.
Some say open houses are more effective in helping agents meet and establish connections with prospective buyers than selling the house in question. “It’s a good opportunity for 1/8buyers3/8 to connect with a real estate agent,” said NAR spokesman Walter Molony.
“It’s almost like having a satellite office,” said Phil Tirrell, owner of Tirrell Realty in East Providence. “Open houses are not personally one of my top ten things — how I sell a home — but what it does, it shows the seller that we’re doing something here,” Tirrell said. “Most people do not buy a house from an open house — but they’ll buy something else.”
“If we have six or seven houses open on a weekend, it’s like six or seven satellite offices,” Tirrell said. “If you have face-to-face contact with a buyer, you’re much more likely to build rapport, you’re much more likely to bond with that person” than if the first contact is over the telephone.
Some sellers, especially frustrated sellers in a rough market, don’t believe their agents are working hard enough if they’re not holding open houses, agents said. Hodnett said some agents may schedule open houses just to show their clients that they’re making an effort, willing to put “sweat equity” into the sale.
Other sellers, particularly owners of high-end properties, don’t want to open their houses to the public, Hodnett said. Many clients worry about security and don’t want unqualified, unknown prospects wandering, possibly unattended, through their homes.
If three or four people are visiting a house at the same time, it’s difficult for one agent to keep an eye on every person every minute. “It’s a major issue on higher-end listings,” he said.
In today’s challenging market, many agents who regularly hold open houses are tweaking the formula to increase attendance by scheduling them at different times, offering food and beverages, and even working with the competition by organizing multi-agency tours.
Sue Powers, an agent with Residential Properties, Ltd., is organizing a Friday night open-house tour in East Greenwich on Oct. 19 from 5 p.m. to 8 p.m. Beer, cider, and German food will be served in an Octoberfest-themed event.
Last Sunday, Powers organized a 14-property brunch open-house tour in East Greenwich with a number of other agencies from 10 a.m. to 1 p.m.
Powers said there were problems with promoting and advertising the brunch tour, and she thinks that turnout suffered as a result, but she plans to use a different approach for the Oct. 19 tour.
“I do a big push in the fall just before the holidays, because that’s a small window of opportunity,” Powers said. “I think you’ve got to try everything. And in this market, you have to be willing to step outside the box.”
“We’ve got to do something different. We were getting one or two people at our open houses” in the summer, she said.
When it comes to open houses, Powers is obviously one of the faithful.
“There are agents who don’t believe in them,” she said. “But I have absolutely sold properties at open houses.”
Powers recalled trudging to one open house at a lakefront property on a stormy, rainy day, thinking that no one would ever turn out in such inclement weather. But she got an offer on the house that very day from one of the stalwarts who showed up.
“It just all depends,” she said.
Copyright © 2007, The Providence Journal, R.I.
Distributed by McClatchy-Tribune Information Services.