Open Houses are a Sham
I question the efficacy of open houses. But every time I express my skepticism, someone always reports a positive result. So let me put the question this way: If a potential buyer attends an open house, and is serious enough to subsequently make an offer, would that same potential buyer not have been willing to make an appointment to see the house? With his own broker, on his own schedule. It seems to me that the only legitimate reason to have an open house is to convert tire kickers into offer-writers. I am not saying that it cannot happen, but what are the odds?
So why do brokers hold open houses? Well it has very little to do with selling your house. Rather, brokers see an open house as an opportunity to pick up buyers as the broker on the buy side. Personally, I find the whole enterprise to be a bit of a sham. When holding an open house, a broker misleads the seller as to his true intentions and thereby falsely raises the hopes of the seller. And at the same time, the broker is meeting potential buyers (for other properties) under false pretenses.
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I’m sorry, but open houses are not an activity designed to convey real property. Rather they are full square in the middle of the client acquisition side of the business. The broker knows that it is extremely unlikely that a potential buyer, who shows up at an open house, will ultimately make an offer on that house. But by golly, the broker wants to hold your house open at least once every weekend until it sells. I have even seen brokers hold open houses after a contract is in place, looking, supposedly, for a backup offer.
Why? Well, it may be unlikely that those potential buyers will make an offer on that particular house, but there’s a good chance they will make an offer on some house. And if these buyers are attending an open house, they probably do not yet have their own broker. So yes, the broker sees an open house as an opportunity to acquire another client.
This might be fine for a vacant property. And I would feel better about open houses if brokers would be honest with their clients as to their true intentions. But think about what an honest broker would have to say: Hey Mr. Seller, do you mind if I hold an open house in your vacant property, so that maybe I can pickup some buyer clients? And hey, if the property is vacant, and if the broker has a good relationship with the seller, sure, why not ask? But the idea of asking sellers to leave their occupied home on a Sunday afternoon under false pretenses…well, that’s just pretty low.
Wow, it turns out that this is one of the shortest chapters in the book. I am a bit surprised. But honestly, I just have nothing else to say about this topic.