Open House: A good way to sell your home in Phoenix?

It wasn’t long ago, when I was attributing a decent percentage of my sales to the success of open houses.  I had several sales that I could point to, in which the open house secured a buyer that otherwise would not have considered the home, or resulted in getting multiple offers (and thus a higher price) for my seller.

For example, I sold a home that did not have a pool, to buyers that had been searching for homes exclusively with pools.  Driving past to a different showing, the buyers asked their agent the ever classic, “Why aren’t we looking at this one?”  For which the agent responded, “It’s open, let’s go look.”  The buyers considered the cost of adding the pool, the opportunity to do it their own way, and wrote an offer that day.

I sold a home in South Scottsdale to buyers that had been looking for a home in North Mesa, when their agent directed them to that area for price reasons.  At the end of a long day, they were returning to a family member’s home, saw my open house, and while they were sure my listing would be too expensive, stopped in anyway.  They wrote an offer in the kitchen, almost refusing the leave the property until the deal was done.

There was a home in North Phoenix I held open for several weekends over a 2 month period, just as the market was beginning to heat up.  I would typically get 4 or 5 people coming through in a 4 hour period, which was encouraging.  The final Saturday, a gentleman came by that had seen the home earlier in the week with his agent.  The agent was actually a full time mortgage broker doing real estate on the side, so she wasn’t available for a second showing.  With the open house, I was able to provide him that second showing (along with some friends and other family members), and in the end overcome some objections he had.  Two days later we were under contract.  There’s no doubt in my mind, that the open house secured this deal.

On the buying side, I know of one planned open house that resulted in my buyer’s making an aggressive offer on a property, just to avoid the likely multiple offer frenzy that was about to happen on that listing if the open house were to go off as scheduled over the next 2 days.

In a roundabout way, I’m coming to my point:  At one point, open houses were a significant tool in my marketing tool bag, and one that if left undone likely would have resulted in longer days on market and lower selling prices for my clients.  No place was this more evident than in McCormick Ranch in Scottsdale.  If you wanted to buy a McCormick Ranch property during the height of the frenzy, nearly the only way you could do so was via an auction-style open house (if you didn’t know someone, who knew someone, that was maybe thinking about selling their home).

Now fast-forward to 2007 and re-consider the open house as a marketing technique.   For the most part, when I hold an open house I’m unlikely to get anyone through the home that doesn’t already live in the neighborhood and isn’t just a curious neighbor.  While most agents have considered open houses to be a prospecting tool, I’m more interested in selling my listing.  I rarely ask for contact information, unless something in our discussion suggests we should meet again.  My focus is on getting a contract on this house today or tomorrow.

Since the end of the frenzied period, my results with open houses have been dismal.  It is clear to me, that as a means to sell a home, having an open house doesn’t work right now.  The market has changed.  It will probably work better in the future, when the market balances.  It will definitely work well the next time we have a seller’s market.  But in a buyer’s market, open houses scream desperation louder than they scream convenience.

These days I will agree to do an open house on one of the first 2 weekends of the listing.  But that’s it.  This gives the curious neighbor a chance to see the home.  While it’s easy to do (there is still a great supply of agents that will use an open house to farm), I’m not going to organize an open house every single weekend.  They are a hassle for everyone involved (particularly for the seller that needs to find something to do for 4 or 5 hours), in which the most likely result is futility.

This last spring and early summer I saw more open houses than I have seen in years.  Agents were clearly desperate to find something that could work that would keep their sellers happy, and magically sell the home.  But it didn’t work.  Buyers today are not driving around in their car on a Saturday afternoon shopping for a home to buy.  They are clicking around at 2am Friday night, or 2pm Monday afternoon (at work), looking for a home to buy.  Sure they will eventually drive the neighborhood they purchase in, but not after exploring every possibility online first.  Buyers are armed with school test scores, Google satellite maps, and the location of the nearest 3 grocery stores before they ever think about piling the kids into the car and trekking across town.  If they do walk into an open house, there’s a decent chance they’ll already have seen it online, and know what the other 2 homes on the street are listed at too.

Ok, the above may be a bit of an exaggeration, today, but will it be 5 years from? Or 10 years from now?  The average buyer still looks for and seeks out the advice of a professional real estate agent to help them out in the home buying process, but they also know enough about current market conditions (whether they believe the hype in the news or not) to know they have some time to make their decision, and thus there’s no rush to make a snap decision at an open house.

To summarize, open houses are a good marketing tool for selling a home, when market conditions are right.  Currently market conditions are not right, and open houses aren’t working.

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