Are Open Houses Dead?

I had breakfast with a broker last week.  He’s a great broker, has come through Real-Ageddon with a few scars on his face but never lost his smile.  His perseverance is paying off:  he’s having a very good year.

Now, understand this:  I am a Help-U-Sell purist.  With no hesitation and absolutely no doubt, I embrace what our visionary founder created.  In short:  If Don Taylor Said It, I Believe It, And That Settles It.  But I am becoming a vanishing breed.  Most Help-U-Sell brokers have adjusted the system here and there, mostly in response to the difficult market realities of the last five years.  I have no problem with that: job one is survival.  But when you talk to me about your sliding scale of fees (versus your SET FEE) or the elimination of Seller Participation from your operational system . . . well, I can get very loud and long winded.  As a result, many Help-U-Sell brokers won’t talk to me about what they’re really doing;  they just don’t want to get the lecture again.

My breakfast broker is different:  he’s made all kinds of adjustments and has no problem sharing them with me.  We debate them.  On tap at this meeting were Seller Participation and Open Houses.

‘I don’t do Open Houses, ‘ he said.

‘Ok,’ I answered, ‘But your sellers hold their own, don’t they?’

‘No.  I tell them it’s a waste of time,’ he paused, registering the shock on my face.  ‘If they insist, I’ll give them signs and they can hold their own . . . but I don’t do Open Houses.’

I was running a little short of breath.  ‘Can . .  you . . please share . . with me . . . why?’

‘They don’t work.  Open Houses are dead,’ he said, ‘Plus, that’s old-style marketing.  It’s what ‘real estate ladies‘ did in the seventies before the Internet made them irrelevant.’

‘But . . .’

‘Buyers don’t work that way anymore.’  He offered me a sip of water in hopes it would help me regain my composure. ‘Today, they’re on the Internet, looking at photos, going to virtual tours.  If they see something they like, they drive by . . . and if it looks good, that’s when they call to get inside.’

‘Really?’  I was picturing a pristine and deserted beach and silently chanting ‘oommm‘ to myself  in hopes of getting my pulse to slow.

‘Nobody has time to drive all over town, dropping in on random Open Houses.   That’s just not the way to get a property sold today.’

When I got back to my office, I did a little Googling.  I discovered that he is not alone in his thinking.  Many agree that the Open House is a vestige left over from a time that has long passed.  But not everyone believes this.  I tossed the question out to our Brokers on our regular Wednesday Power Hour Webinar.  Most were absolutely on-board with Open Houses and mostly with Seller Participation.  As I listened to them I began to realize where the discord was coming from.

It all has to do with being clear about what you want to accomplish.

If your goal is to sell the house that’s being held open . . . well, that’s a rare occurrence at best.  Maybe Open Houses as a strategy for accomplishing that . . . are dead.

But a couple of Help-U-Sell Brokers said the principal benefit of Open Houses (held by them) is the opportunity they provide to present their program to potential Sellers – the neighbors, the casual drop-bys.  People are surprised to find a Help-U-Sell Broker sitting on an Open House and say something like, ‘Gosh, I didn’t think you guys did Open Houses.’  And that opens a whole dialogue about who we are and what we do.

Others talked about the benefit of having dozens of additional directional and Open House signs up in the neighborhood.  The added visibility boosts inquiries from both buyers and sellers.

And finally, there were those who talked about how Seller-held Open Houses create additional opportunities for lead capture, opportunities that don’t involve the Broker’s time.  Going back to Don Taylor:  A well-coached Seller, holding his or her own Open House, always gets contact information on anyone coming through.  On Monday morning, that list is faxed to the office for followup.  Most times, the visitor has eliminated the subject property . . . but is open to hearing about others (bingo!);  and sometimes, with a little clarification, they are ready to make an offer on the subject property (bingo again!).  A Help-U-Sell broker who has done a good job of selling Seller Participation may walk into the office on Monday morning to find 3 or 4 or more sign-in sheets in the FAX machine, and suddenly there are half a dozen more buyer leads.

So, here is the message:

As with every piece of marketing you do, the first order of business is to define exactly what it is you want to accomplish.  Then track results in terms of what you said you were after and evaluate the program based on that criteria.  Simple.

What might you want to accomplish with an Open House?  Pick one or two, not all five:

  • Sell the subject property
  • Make contact with buyer prospects who probably won’t make an offer of the subject property but who may buy something else through you
  • Create an opportunity to spread your message to potential sellers in the area
  • Boost your visibility in the marketplace through increased signage (directional and Open House signs)
  • And in the case of Seller held Open Houses, multiply your efforts, getting more done than you can do yourself
My breakfast broker decided the only thing he might want to accomplish with an Open House was to sell the subject property.  That’s an iffy proposition at best, so no wonder he thinks Open Houses are dead.  As a marketing tool, however, Open Houses do hold all kinds of  other possibilites.
By the way:  there is acutally a sixth reason to hold an Open House and I left it off the list because Help-U-Sell Brokers generally don’t do it.  It is often the only reason an ordinary REALTOR holds an open house:
To create a false impression of activity thus pacifying an anxious seller for another month.

A Marketing Lesson

Sometimes great marketing is so simple, so basic, hardly hi-tech, not even expensive.  Let me tell you what I saw today.

Early this morning I went over to the Morley Field Velodrome.  It’s a bike racing oval in San Diego’s Balboa Park – a wonderful thing where spandex clad riders tear after one another on banked curves and slanted straighaways.  Today they were having their regularly scheduled bicycle swap meet – an occasional event where local bike shops and individuals sell everything bicycle.  I’d heard about it and wanted to see for myself.

‘Get there early!’ my friend said, so there I was, in line behind about 200 others at 8:15 am.  ‘What time do they open the gates?’ I asked the couple in front of me.  ‘Oh, usually around 9,’ was the reply.  That’s where I woosed out.  It was chilly, I was in shorts and had nothing in particular to purchase . . . no way I was going to stand there in the cold for 45 minutes!  If I’d wanted to buy a $2,000 bike for $1,200, it would be worth it, but I was only curious.  So I left.

Pulling out of the lot I came face to face with an open house directional sign with a brilliant flourescent pink flag on top.  It’s a local independent broker I don’t really know . . . but I like the neighborhood so I figured, what the heck else am I going to do at 8:30 am on a Sunday (seeing how I’ve given up pancakes)?

So I started on my pilgrimage to the open house.  From my starting point to the property was about 2 miles.  In that distance I counted – get this – 21 directionals, each one with a bright pink fluorescent flag on top.  These were nice signs:  A-frames all in excellent shape.  As I neared the property and, I guess, the center of her target market, I started seeing bus benches with her distinctive logo – the same one that was on the directional signs. By the time I got to the house, I’d counted 7 of them.  That’s 28 impressions on only one of the routes to the house.  I have no idea how many other routes she mapped.

Of course, when I got to the house I discovered it was open from 1pm – 4pm in the afternoon, that it was overpriced (in my humble opinion) and not much to look at from outside.  The flyer box was full, tough; and interesting:  the house next door and one across the street had staked flyer boxes in the yards with a small rider sign stating ‘Coming Soon.’  It was the same agent.

How many times have we heard it?  Signs are your best marketing tool.  But how many of us go to this extent to maximize their power?  I can’t remember who it was on our regular Wednesday Power Hour call who talked about using as many as four directionals at an intersection for an open house.  I was amazed a that; but it was nothing like this!  Overpriced or not, you know that broker had traffic today, whether she ran an ad or not.  She may even have sold the property or one (or both) of the others on the block.  I think it would be a safe bet that she picked up a good buyer or two as well.

Think about it.  I saw, roughly $600 worth of directionals in my two mile drive.  They are reusable, so she’ll get much more mileage out of them than she did today.  The bus benches are about $250 a month and I saw 7 – that’s $1,750 a month, a healthy budget especially since she probably has more that I didn’t see.  But they are keeping her in that top of mind spot in her target market so that every other bit of marketing she does is that much more effective.  Best of all, it’s safe to say she had a productive Sunday afternoon . . . and what is your time worth?

Remember:  we are in a turf war.  You’re fighting for control of a little piece of real estate located between the ears of everyone who lives in your target market.  The name of this place is ‘The Best Real Estate Company To Call.’ And the company who wins it will do it with visibility and consistency.  My hat’s off to this local independent broker today:  you showed me Help-U-Sell marketing at it’s finest.  Hey – maybe we should talk…