Real Estate Myth #37: Sunday Open Houses

"Open House Available For a Terrific Listing That Always Gets Great Traffic"

One of the more durable myths out there is why Realtors do Sunday open houses: many clients (and prospective clients) seem to believe that the primary motivation isn't to sell the client's home, but for the hosting Realtor to troll for future business and ultimately sell other homes, down the road.

The reality is a bit different.

If Sunday open houses were such a great way to pick up clients, you'd see more listing agents doing them.

In fact, the majority of listing agents avoid doing them.

Instead, they try to line up replacements -- typically, newbie Realtors -- by dangling carrots like this: 'Open house available this Sunday for a terrific listing that always gets great traffic.'

Just once I'd like to see a listing agent level with would-be pinch hitters with a hook like this: 'open house available this Sunday for a not-so-appealing home in an out-of-the way location that's already been for sale for 8 months, is (still) priced above market, and may get 3-4 people through -- if you're lucky.'

Notoriously Low Yield

What the (experienced) listing agents know that the newbie's don't is the following:

--Most people coming through open houses aren't interested in buying a home at all.

They're just curious about what the home looks like inside; are interested in interior decorating ideas; want to see what prevailing home prices are so they know how much their home is worth. Etc., etc.

--The distinct minority of prospective Buyers who are serious are invariably already working with a Realtor. Which means they're strictly off-limits.

--The remainder of Sunday open house prospects -- people who maybe, kind-of are looking -- usually are characterized by one (or more) of the following: a) they can't afford the house (or any house); their timetable is next year (or century); they have no idea what they're looking for, at what price range, or where.

So, yes, a new Realtor who has time on their hands and plenty of patience is welcome to follow up with such prospects -- assuming they leave valid contact info -- in the hopes they'll eventually buy something.

Or not.

The Case for Open Houses

All of which begs the obvious question: if open houses have such a poor track record, why do them at all?

For two reasons:

One. As a convenience to serious, already-represented Buyers, who are typically off work on Sunday afternoon and can cover more ground going through open's (vs. having their agents set up private showings during the week).

Two. Because, while the odds may be low . . . you never know. (See, "The (Mythical?) Serendipitous Buyer").

In truth, the vast majority of things Realtors do to market homes -- at least individually -- have a low probability of success.

So, the odds of a private showing leading to a consummated transaction are less than 10%; the odds of exposure at a Broker Open (Tuesdays) leading to a sale perhaps only a little better.

Ditto for blast emails to neighborhood Realtors; direct mailings; high-end photography and literature; "plugging" listings at various Realtor meetings, etc.

But therein lies the rub.

Precisely because you don't know which marketing effort will ultimately sell your client's home . . . a good Realtor does all of them.

P.S.: the foregoing recalls the marketing director of a Fortune 500 company who laments that she knows she's she's wasting half her marketing budget -- she just doesn't know which half.