OPEN HOUSES
We have created a new series called “Open Book” where we’ll be peeling the onion that is real estate agent rhetoric in the Toronto and GTA markets.
Our goal with this isn’t to throw shade at any particular real estate agent out there doing his or her best, it’s to expose some of the time honoured misdirections and misconceptions that seem to be carried down from generation to generation and pushed on buyers and sellers in the real estate world.
We won’t spend too much time discussing how 90% of Toronto agents close ONE OR LESS sales each year. That said, it’s a contributing factor to why a lot of people are mislead about many elements of a sale, including open houses.
Do Open Houses Sell Houses?
Statistically speaking, no. At least not very often. According to the National Association of Realtors (US), less than 7% of buyers discover their next home through an open house, whereas over 50% of buyers find their next home online (that percentage jumps to over 60% when looking specifically at people aged 20-30 years old).
Then Why Do Agents Do Them?
This is where the golden egg comes in. The reason real estate agents push open houses is because it is a GREAT, virtually FREE, method of generating “leads” for the listing agent. Nosy neighbours, Sunday strollers, tire kickers, and just generally curious strangers tend to frequent open houses as a fun way to spend an afternoon. Disappointing news for sellers, but great news for an agent who is looking to meet more people and potentially secure new clients.
What If My Agent Has A Colleague Host the Open House on Their Behalf?
It’s very common for a listing agent to assign a junior agent or colleague from their brokerage to host the open house instead of being there themselves. It’s a great way to give a new agent some experience and an opportunity for them to generate some new business. Ultimately, the purpose of an open house is to add “leads” to your database. For seasoned agents, it’s not necessarily that they don’t WANT new business, it may just be that they’re not in the position where they can take on new clients at that very moment. In which case, why not let a junior have a crack at it?
Do Actual Buyers EVER Go To Open Houses?
They sure do. The catch is that most of the time it’s because of only two reasons;
- to save their own agent from booking yet another showing appointment in the midst of a long drawn out house hunt.
- they are very early on in their house hunt, in the “browsing” phase, and not yet ready to make any offers anyway.
Bottom line, is that the majority of the time the only visitors to an open house are people that are either not serious enough about buying (therefore haven’t hired an agent to help get them qualified and begin their search), or they are neighbours sizing up your house in comparison to their own. Maybe they plan to sell soon, maybe they don’t have an agent yet…
So, Should I Not Allow Open Houses During My Sale?
This is where our advice may ruffle some feathers; if an agent is selling you on the idea that open houses are an essential element to marketing and the purpose is to sell your house, then that agent isn’t being 100% honest with you despite what may be their best intentions (we’ll give them the benefit of the doubt that they may not even fully understand the facts themselves).
In which case, you have some conversations to have and possibly some decisions to make.
However, if an agent tells you straight up: “look, open houses are better for me than they are for the sale, it’s a great way for me to generate new business and even though my goal will be to expose your home to as many people as possible and try to find you a buyer, it’s unlikely an open house will actually result in an offer”, then you have found a rare caliber of professional agent and why not give them the option to go ahead and host?
…maybe you’ll get lucky and your fully qualified buyer unexpectedly walks into the open house, falls in love immediately and makes you a firm offer that same day at full price (or better) with your required closing date! 🤪
*This article is for information and conversation purposes only and is not intended to solicit buyers or sellers currently under contract with an agent*
