Here’s a statement that may surprise you:
In all likelihood, an open house is not going to sell your home.
Now, if that doesn’t sound quite right, then I suspect it may have something to do with the fact that seemingly every other social media post by real estate professionals is boasting of the huge success at their most recent open house. Or, maybe you’ve even seen statistics claiming that most buyers utilize open houses in their home search. So… which is it? Are open houses essential to the process of selling your home, or are they a waste of time?
While of course everyone will have their own anecdotal claims, numbers just don’t lie; and according to a National Association of Realtors’ 2023 report, only 4% of home buyers found the home they purchased through an open house or yard sign (which means the number purely from open houses is even less). Now, at first glance, this number might seem to conflict with other oft-cited statistics, such as the fact that over half of home buyers claim to have used an open house as a source of information during the home buying process. But note the terminology here, “used an open house as a source of information” is not the same thing as “purchased a home that they found due to an open house.” Using an open house as a source of information could include things like going to an open house to check out the feel of the community, to see what kinds of floorplans are available, or even just to get inspiration and design ideas for the home that they eventually do purchase. None of which is particularly helpful to the seller of the open house in question.
But what about those open house success stories you’ve likely seen in the form of social media videos and advertisements talking about huge numbers of visitors resulting in multiple bids and going into escrow above asking price? Well, it’s important to remember here that just because offers are received following an open house does not necessarily mean that those offers were the result of that open house. Consider this very common scenario in our current housing market: you’ve got a brand new listing, it’s priced very well (meaning at or even below fair market value), in a neighborhood with very little for sale, and very high buyer demand. Now, because it’s put on the Multiple Listing Service and sites like Realtor.com and Zillow, any prospective buyer that’s already looking is going to see the listing right away and will naturally try to schedule a showing… only to find out that there are no showing times available until (you can probably guess) the first open house during the coming weekend! So, naturally, that first open house is packed full of visitors, including basically every single serious buyer that would have scheduled a private showing. Then, when one of these prospective buyers does go on to produce an offer, it can appear that the open house was responsible for that offer… while, in all likelihood, that buyer would have scheduled a private showing and submitted an offer regardless.
At this point you may be asking: if an open house isn’t likely to produce unique buyers for your home, what’s the point of having one? Is it really nothing more than an opportunity for your agent to pick up new clients while your nosey neighbors pick apart your choices in home decor? Well, don’t jump to any conclusions just yet.
Yes, it certainly could be the case that the majority of visitors to your open house end up being nosey neighbors and non-serious buyers that are just browsing (and may not even be qualified to purchase your home to begin with) but that isn’t necessarily a bad thing! Consider the psychological impact on a genuinely interested buyer visiting your open house only to see it filled with other ostensibly interested parties. The few serious buyers mixed in with the ‘looky-loos’ may see the high turnout as a sign of genuine demand for your home, incentivizing them to produce an offer at more favorable terms or even a higher price than they might have otherwise. An open house can also be a tool of convenience for you as a home seller, as many of the showings that may otherwise have been scheduled haphazardly throughout the week (each requiring you to prep and leave your home) can instead be fit into a single three or four hour window. And don’t forget, while it may only be about 4%, opting out of an open house does leave a slice of your home’s potential buyer pool out of the equation.
So, taking all of that into consideration, when selling your home, should you insist on having an open house or not? Well, as with most things, there really isn’t a one size fits all answer. On one hand, an open house can absolutely be a powerful sales tool, not because of the slim chance of getting an offer that you wouldn’t have received otherwise… but because of the decent chance of getting a better offer than you would have received otherwise. But it’s also important to understand that an open house isn’t a magic bullet, and will never be enough to compensate for your home being priced above market value or poorly marketed on the internet and MLS, where the vast majority of buyers find the home that they end up actually purchasing.
If you’d like to know the fair market value for your home - or have any questions about open houses or any real estate matter - just ask!
Jonathan Kallestad -Realtor
Heroes Real Estate Team / (661) 644-2182