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Re-inventing the Open House

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By Joe Cooke

According to the latest National Association of Realtors buyer profile, 48% of all home buyers go to open houses. However, when asked where they learned about the home they purchased, `open house’ did not even show up. Statistically speaking, open houses don’t sell homes. Your own experience probably bears this out, so you might conclude that open houses are a waste of time, since people visiting an open house end up buying something else.

But stop and think for a moment. First of all, many homeowners like to have their home held open. They may even expect it. Second, if almost half of all home buyers are visiting open houses, but not buying the homes they visit, what are they buying?

Cross-Pollinating
Buyers are always playing a game of elimination-even more so in a buyer’s market. They have so many houses to choose from, they are trying to narrow down their selections. Often, going to an open house is a way for a buyer to get a feel for what they do and don’t like. Therefore, when you hold an open house, don’t think about how to sell the house, think about how to help the customers find what they want. Also think about how you could establish trust and rapport without being pushy.

One great way to do this is to hold two or even three open houses back-to-back (or simultaneously, if you have a team.)

Before You Go
Identify other homes in the market that are similar as well as some that are quite different. For instance, if you are holding an open house for a home with five bedrooms, you will most likely attract two kinds of buyers-those with a large family and those looking that that price range. You can create two cross-pollination lists-one of homes with four to six bedrooms, and one of homes in a similar price bracket with different characteristics, such as fewer bedrooms.

Setting Up
Remove all flyers from the box out front. Do not leave them sitting on a table either. Hold them in your hand unless there is so much traffic that you can’t greet everyone.

Don’t ignore the traditional touches. Make sure the home is as tidy as possible. Also, baking something ahead of time, like baked apples with cinnamon, or molasses cookies, can make the home smell inviting. Light some candles, take pets to the neighbors and by all means send the homeowners out shopping. Hosting an open house is a skill that is best left to professionals, like you.

The Guest Book
Always have a sign-in sheet. The less information you ask for, the more information you will get. For instance, if you ask for name, phone and e-mail address, you will often get all three. If you ask for more, you will often get nothing.

You may want to seed the sign-in sheet by filling in the first line with a name, phone number and e-mail address, such as Joe Sample, 555-5555, joe@joesample.com. You could also have an assistant, friend or even your team-mate sign in first, just to get things started. People tend to feel more comfortable filling out a sign-in sheet if they see that others have gone first.

Asking Questions
Introduce yourself, hand out a flyer and have them sign the guest book. When you introduce yourself, thank them for coming to the open house. “Thank you for coming today.” Reach out and shake hands, if you’re comfortable with that. Hand them a flyer.

“Please sign our guest book. We do this so that we can report back to the home-owner, just like we would if we were holding your house open.”

Gesture toward the sign-in sheet or guest book and immediately say, “Thank you.”

Your goal is to send them off with a list of other homes in their price range or that fit the physical characteristics they are seeking. This simple mandate should guide your questioning.

“Feel free to look around. I’ll be close by, to answer questions. Also, since I represent the homeowner, I do tend to watch over the house as people are browsing.”

You want them to allow you to hover. In fact, if they ever decide to list their home, you want them to remember you as someone who represented the homeowner well, by having everyone register and by being present as people wandered through private rooms. If you explain this nicely to your visitors, they will understand and you will make a good impression.

As you begin to establish some rapport, you should ask if they are working with a real estate agent currently and if they have signed an exclusive buyer agreement.

Follow-up
The key to any prospecting method, especially open houses, is follow-up. As the day goes by, take notes on what your visitors are looking for. Later that day, at the end of your last open house, do these three things:
(a) cross-check all of your notes with your sign-in sheets,
(b) add these prospects to your database and
(c) schedule a follow-up activity, such as sending an e-mail of homes that might fit their criteria, a phone call asking if they found an interesting house during their shopping that day or even a personal note if you have their address.

Be bold but not pushy. Be respectful of the other agents in town, but remember that unless someone has signed an exclusive buyer agreement with another agent, they are free to choose the agent that fits them best.

If you held your open house (or open houses) on Sunday, then you should spend the first few hours of your Monday morning following-up. Once you get in the mind-set of holding open houses as a database-building tool, you will naturally begin to collect the kinds of information you need for next-day follow-up.

Open Houses as a Listing Tool
Cross-pollinating is also a great listing tool. During your listing presentation, as you are going through your tool-box of marketing ideas, you can explain to the seller how you hold several, complementary homes open on any given day. If you have a chart from your broker or local MLS that shows statistically how few people find their home from open houses, you can use that to your advantage. Many people think that they can sell their home themselves if they just advertise it in the paper and hold it open. To some extent, that was true during the hot market of the past few years, but now that we are back in a buyer’s market, those two strategies are the least effective. If a seller realizes that open houses sell homes other than the one held open, they will then realize that they can’t do this on their own – they need the power of the MLS.

The Paradigm Shift
Once you realize that the people walking through your open house are statistically unlikely to buy that particular home, then you can make an important mental shift to this: the information you have on the house you are holding open is not as important as the information you can give on houses they have not seen. Therefore, to be helpful, you have to ask questions about what they are looking for. Your job is to connect them with their dream home. The least helpful thing you can do is to try to sell this particular home to them.

Joe Cooke is an author, speaker and entrepreneur with over 25 years of experience in real estate, marketing and management. Visit www.joecooke.com for more information on how to build your real estate business.

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