Do Open Houses Really Sell Homes?
One could argue that open houses actually benefit the listing agent more than the seller.
I've always enjoyed working from home. In my most recent job prior to real estate I worked for a major US telecom company from home in Toronto for over 4 years. I found working from home to be super efficient. I would wake up, hit the gym, and be back at my home office ready to log in before most people at "regular" jobs had even gotten to the office yet. I didn't have to get ready, shave, get dressed, and tackle a commute before sitting down to work. Zero wasted time.
And being at home meant I could do all those little things around the house that I would've had to do otherwise do in my personal time - laundry during the day, letting a handyman or plumber in, etc.
One of the best parts was that when my day ended, I would turn off my laptop and I was home. No crazy commute stuck in traffic or waiting for the subway. I loved it.
But there were definitely downsides. I didn't physically meet my boss who was based in LA until 6 months into the job. I only saw my team in person once every 3-4 months (they were based all over the US). I spent A LOT of time communicating on the phone (as someone who hated phone calls prior to this, that was tough), via chat, and email - many things that would normally be a 30 second in person conversation would turn into several back and forth emails or an unnecessarily long video conference. I mean, if you're in an office you can spin around, ask your colleague a question, then spin back around and get back to work. Working remotely doesn't afford that convenience.
Despite all that, I found myself to be WAY more productive than when I used to work in an office. No team coffee breaks, no distractions from people walking by, no silly meetings that could have been emails. I could just work.
The best part to me was the freedom of knowing nobody was looking over my shoulder all day, watching what I was doing. If I felt I needed a break to zone out and watch YouTube for a few minutes, I did it. If I wanted to go for a walk, I did it. It was actually better for my stress levels knowing my boss or clients weren't physically around. And oddly enough, it actually made me more productive. I felt I needed to prove that I wasn't watching YouTube all day and that made me hyper responsive to emails and phone calls. I mean, if you email someone who's working from home and they don't respond in a few minutes, tell me your first thought isn't "he must be watching Netflix". So there's a sense of responsibility to be extra responsive to show you're not slacking off all day. Or maybe that's just me.
Working from home isn't for everyone and for a lot of folks it's just physically impossible. But I think the situation most of us are facing right now will force companies to get used to the reality that going forward, more and more people can, will want to, and sometimes will be forced to work remotely. The difference today is that we have no choice and probably feel more like prisoners at home rather than being granted what is normally seen as a benefit. I work from home everyday and usually love every minute of it but man...I'm going a little crazy now!
This new global health scare we're in now has also prompted the debate about whether open houses should be permitted during the process of selling a home, when the the call for social distancing is stronger than ever. Which got me thinking about the value of open houses to begin with.
I've often had buyer clients say to me "Adil, this house is perfect! We should see it before the open house this weekend so that if we like it, we can beat all those open house visitors with an offer." And while I always love to see a sense of urgency from buyers, I've often wondered what the open house has to do with anything. Do people actually walk into open houses a buy properties?
The short answer is no. Almost never.
In fact, I'm completely honest with sellers when they ask if I'll host an open house. Open houses will mostly attract nosy neighbours who want to see what you did with your kitchen or how you decorated your house more than it will a serious, qualified buyer. I tell it like it is - "if a buyer is seriously looking, they'll be working with an agent already and they'll book a private showing. That's how real estate is really sold."
I'll also share a not-so-secret secret with you - The open house benefits me as a listing agent more than you as the seller. It's a chance for me to meet neighbours, meet prospective buyers, and honestly get my face out there in front of more people. That's 99% of the reason most agents host open houses. To get new buyer or seller leads. That's what we need to keep earning a living.
The conversation at an open house usually goes like this:
- Me: "Hello open house visitor, thanks for coming. Do you live in the building/neighbourhood?"
- Visitor: "We actually live next door and were just curious to take a look and wondering about the price."
- Me: "We're listed for $899k but we expect to sell much higher than that. How does your house/condo compare?"
- Visitor: "Our place is very similar, but we have a nicer kitchen and our view is a little better. What do you think our place is worth?" ps - (everyone always thinks their place is better ;)
- Me: "I'd be happy to come by after I'm done here to take a look!"
And that's how we roll. I've had that exact conversation countless times. It's either that or something like this
- Visitor: "No, but I like this area so I wanted to see what's out there. I'm not ready to buy yet"
- Me: "Got it. Did you need 2 or 3 bedrooms? I'd be happy to send you a few other options on the market now to see what's out there."
And that's another lead for me.
Now don't get me wrong, open houses can be helpful in other ways. I've often sent my clients to open houses for places they're curious about that I know they won't like for one reason or another but they still want to do their own research to know for sure. This gives them a 2 hour window on a Saturday to poke around a new area or type of house and come to the conclusion it's not what they want.
My favourite clients will even send me listings and say "Adil, this house isn't what we want but we're going to check it out anyway during the open house just to make sure. We don't want to waste your time but we'll let you know if we like the area".
Perfect. Use open houses to satisfy your curiosity so we can focus on what you really want. Love it!
From the listing side, I think it's possible for open houses to create a sense of urgency with buyers, like my clients above who want to get in to see places before an open house. It's true that the more people who see a house or condo for sale, the more likely it will be to sell quickly. So call it a marketing strategy to host an open house. Give seriously interested buyers that FOMO feeling that they have to act fast. So I guess I can get behind the idea that the open house could actually help the seller in this regard and maybe get people in the door faster.
In case you were wondering, OREA and TREB have "strongly advised" that open house be cancelled in the short term, and some brokerages, like iPro Realty where I work, have effectively disallowed them for the immediate future. I don't think OREA or TREB have the legal grounds to stop agents from hosting open houses but brokerages do. And I completely agree with this ban. It's a health risk that's not worth taking right now. Agents will just have to be more invested with their listings. Virtual tours will become mainstream more than they are today, as will digital floor plans and professional pictures that don't look like they were taken through a fishbowl lens. And good luck to agents who use their phones to take listing photos, or don't upload pictures at all! Buyers will be forced to be even more selective online before physically leaving their homes, and that means listing agents will have to step up their games.
Will this be the end of the open house for good? Nah, I think open houses are part of the real estate experience. I've heard people say that shaking hands will never happen again in society after this crisis but I highly doubt that something so ingrained in society will stop when life finally goes back to normal. Open houses are, in a similar way, ingrained in real estate culture. Useful or not, I'm certain they'll be back eventually. As a seller, don't worry if your agent isn't married to the idea of hosting an open house even when things get back to normal out there. There's more in it for them than you anyway and you really won't be missing out.
Have you checked out my previous blog posts?
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Your Toronto condo lover,
Adil Dharssi Sales Representative iPro Realty Ltd, Brokerage Direct: 647-223-1679 (call/text) Email: Adil@AdilKnowsCondos.com