When I discuss the techniques used in selling a home with new home sellers, most are curious about my opinion on open houses. For those readers who missed my past article on real estate open houses, I addressed conversation rates and REALTOR® motivation for conducting them. But what about the relevance of holding an open house in 2010 and is it really necessary in the process of selling a home?
Understanding The Home Buyer's Process
The greatest lesson that I have learned in business is that if you want to understand "how to do something right," then you ought to look at the problem from the vantage point of the consumer. In this case, I think you need to understand what today's home buyers are doing to find potential homes to buy, and then determine how holding open houses might fit into the equation.
How Home Buyers Used To Search For Available Homes
I started my real estate career in 1991. The very first "big lesson" that I learned was that computers were not really being utilized in the industry. A few real estate agents owned computers, but all of the industry systems were still being managed on paper.
The Tallahassee MLS was a paper-back book and the "dial-up" MLS was not used by a majority of the active real estate professionals in Tallahassee. Ultimately, if a home buyer wanted to get a big picture of the market, they had to drive around the neighborhoods in which they were interested.
REALTORS® knew that many buyers drove around on the weekends, and a key part of a real estate marketing plan for homeowners included the weekend open house. One could argue that to have the best chance to sell a home, you had to have an open house on the weekend.
Before the weekend, top real estate professionals would market the open house event to everybody in the surrounding neighborhood. The plan was to get everybody informed and involved, and hopefully get 10 to 15 "walk ins" on the weekend.
How Home Buyers Search For Properties Today
Flash forward to 2010 and the home buyer still wants to get a solid overview of the market. Many buyers find homes by "surfing" around the neighborhoods on their computer instead of driving around them by car, so the need for open houses has been changed.
No longer is it acceptable to be open on the weekends, today's open house needs to be available 24/7. Many home buyers are looking at homes while at work, or late at night, so the Sunday open house is convenient only to a minority of home buyers
Getting the word out has changed as well. We no longer market to the neighborhood, we have to market to the pool of potential home buyers all around the world. While we used to have a goal of getting 10 to 15 people in the home, we now are seeking 100 to 1000 "page views" for each of our open houses.
How The Open House Has Evolved On The Internet
The "Open House" of yesterday has evolved to the "Virtual Tour" of today. We know now that less than 1% of buyers discover their home they purchase at a traditional open house, and that 94% of home buyers are using the internet. This has not made the open house a "thing of the past," it has only moved the arena of the event.
Most real estate companies and real estate agents think of the virtual home tour as an "option" in their marketing plan, and I do not think this is wise. A virtual tour will replace the process of the traditional open house for many buyers, thus ensuring maximum exposure of the home for sale.
The Advice You Receive From Your REALTOR®
If you are considering selling your home, the very fact that you are reading this blog post tells me that you want to know the best ways to sell a home. You are doing your diligent research before you hire a REALTOR® to sell your home. I personally believe this gives you a "leg up" on your competition at a time when the market is highly competitive. So how do you use this information to your advantage?
I would consider this a great qualifier during the real estate company selection process. Ask the agent that you interview what his or her thoughts are on open houses. If they tell you they will hold one on the weekends, you should be gravely concerned that they do not understand how to find today's buyer for your home.
Now I'm not saying open houses are bad or that they do not generate buyers (remember less than 1% for your specific home), I'm just saying "how good is the real estate agent and the real estate company if they tell you they will sell your home because of a traditional open house?" Choose to work with a great real estate company that knows how to reach the 94% of homebuyers who use the internet to when buying a home!
Joe Manausa, MBA is a 26 year veteran of real estate brokerage in Tallahassee, Florida and has owned and managed his own company since 1992. He is a daily blogger with content that focuses on real estate analytics and providing his clients with a tactical advantage in today's challenging market.