Do Open Houses Work?

Yes but…before we dive into how/when Open Houses can work as a prospecting strategy for agents a disclaimer.

One of the signature Curb Hero products is a digital Open House sign-in (check it out below) so YES we’re biased on the topic of Open Houses. However in writing this article we’ve only included feedback gathered from a broad sampling of real estate agents…irrespective of whether they’re Curb Hero users.

So back to the question “Do Open Houses work?”

Again…YES but there’s some nuance…so we’ve broken this down into a few perspectives:

• The Good News: Yes Open Houses work
• The Bad News: Success Depends on Certain Factors
• One Proven Way to Generate More Open House leads

Open Houses are Proven to Work

While having success holding Open Houses depends on a lot of dynamics, generally speaking Open Houses are a very low cost (therefore high ROI) prospecting method.

Open Houses are Perfect for New Agents

Many successful veteran agents can recall their earlier years in the industry (before they had a steady stream of referral and past client business) and Open Houses were a key source of new clients.

There are many reasons why newer agents tend to rely on Open Houses as a prospecting strategy:

• A well executed Open House can add a large number of prospects to a new agent’s database
• New agents are typically hungry for business and are willing to spend weekends prospecting
• Open Houses cost nothing host (yes they do take time though) but that means they have VERY high ROI…which is very appealing to new agents with limited budgets
• Open Houses can feel more social and fun for extroverted agents.
• If a newer agent is shadowing a more experienced agent at an Open House, there’s a clear opportunity for mentoring and networking
• Open Houses are easy ways to start building a brand within a community and eventually evolve to more expensive approaches like hosting events and geo-farming

There are plenty of other reasons that Open Houses are great for new agents. Another reason is that some teams REQUIRE their newer agents to host a certain number of Open Houses. On that note…

Open House Prospecting is a Natural Fit for most Real Estate Teams

Many Real Estate Teams have incorporated Open Houses into their team’s prospecting to accomplish multiple goals. Here’s why Open Houses work so well for teams:

• The Listing Agent on a team (usually the lead/owner of the team) doesn’t want to host every single Open House so it opens up a mutually beneficial opportunity for other agents to host the Open House
• One reason agents join a Real Estate Team is to get client prospects that they wouldn’t otherwise generate on their own. However, paying for leads is expensive…so giving agents Open House prospecting opportunities using the team’s existing listings is an inexpensive solution.
• Many teams use Open Houses as training opportunities for newer agents. Some like Andy Tse (see video below) will set a goal for the number of Open Houses they need to do each week
• Teams are also serious about standardized processes and overall efficiency which means they’ll use systems to ensure all Open House visitors make it into the CRM and get followed up on…therefore maximizing the value from each agent’s Open House

Andy Tse is a great example of a team lead that’s proven the importance of Open Houses (at last count his team is at $1BN annual volume).

This is why weekend “Open House duty” on teams are often highly sought after by hungry agents on a team.

In our research for this article we encountered dozens of testimonials from agents who’ve seen success with Open Houses. The very act of orchestrating an Open House introduces a real estate agent to an entire spectrum of prospects and this goes beyond buyer leads to include neighbors that may, one day, be seller leads.

Some agents that shared their experiences with hosting Open Houses proudly listed the repeat transactions they did for clients that they originally met at Open Houses earlier in their career. These agents counted these Open House prospects as their most lucrative and enduring partnerships in the business.

…but as you’ll learn below, just holding an Open House doesn’t automatically unlock a trove of new business.

Ok, well “it depends”

There is a clear disparity in experiences from agents that host Open Houses. While some realtors swear by Open Houses as a key driver of client acquisition, others view them as a waste of time.

A handful of agents that volunteered their experience managed to rope in a few clients but felt the results were underwhelming. So why the range of results?

External factors such as market conditions can play a part but so can the agent’s execution such as their follow-up processes. Here’s a list of the various factors to consider that could sway an Open House’s success.

1. Listing Price: The listing price significantly impacts open house success by attracting the right buyers. If a property is priced competitively based on market analysis, it’s more likely to draw interest and potential offers. Overpriced listings, however, might deter potential buyers from considering the property seriously.
2. Listing Days on Market (DOM): Listings with fewer days on the market tend to attract more attention because they are perceived as new and potentially more desirable. Properties that have been on the market for an extended period may be viewed as less desirable or overpriced, which could affect open house attendance and buyer interest.
3. Housing Supply: In markets with low housing supply, open houses can be highly effective due to increased competition among buyers. Conversely, in a market with high inventory, attracting buyers may require more effort and strategic pricing to stand out.
4. Listing Promotion: Effective listing promotion through various channels (online listings, social media, real estate websites) before the open house can increase visibility and attract a larger pool of potential buyers, enhancing the open house’s success.
5. Open House Promotion: Dedicated promotion of the open house itself, including yard signs, online ads, and community postings, can significantly increase attendance. The more effort put into promoting the event, the higher the potential turnout and interest level.
6. Buyer Interest in Property (before and during Open House): Pre-event interest can gauge how well the open house might be attended. During the event, the agent’s ability to gauge and increase buyer interest through highlighting features and benefits of the property is key to converting attendees into potential buyers.
7. Agent Approachability and Rapport Building Skills: An agent’s ability to be approachable, friendly, and skilled at building rapport with visitors can make a critical difference. These skills help create a positive impression, making potential buyers more comfortable and open to discussing their needs and interest in the property.
8. Agent Credibility: An agent’s credibility, established through knowledge of the market, the listing, and effective communication, can significantly impact buyer confidence. Buyers are more likely to engage with and trust agents who demonstrate expertise and professionalism.
9. Lead Info Capture: Capturing lead information efficiently during the open house allows for effective follow-up. An agent’s system for collecting contact details and preferences can turn casual visitors into serious prospects.
10. Lead Follow-Up: The follow-up process is crucial in converting leads into clients. Timely, personalized follow-up communications can keep the agent and property top of mind, increasing the chances of securing a buyer or gaining referrals, even if the initial open house does not result in an immediate sale.

One way to get better results from your next Open House

We’ve got a ton of Open House ideas to make sure it lives up to it’s potential, but here’s a way to that’s both free and proven to work. Ahem yes, we’re talking about our digital sign-in which you can learn about here.

In conclusion, the effectiveness of open houses as a tool for selling properties and generating leads in the real estate market is not a one-size-fits-all answer. It hinges on a myriad of factors, including market dynamics, the approach of the agent, and the strategies employed before, during, and after the event. When executed with precision and strategic insight, open houses can indeed serve as a potent avenue for attracting potential buyers, networking, and building an agent’s brand presence within the community.

The success stories shared by numerous real estate professionals underscore the potential of open houses to yield significant returns. These returns are not just in terms of immediate sales but also in fostering long-term relationships that can blossom into future business opportunities. However, it’s clear that the effectiveness of open houses is contingent upon a proactive approach—ranging from how the property is priced and marketed to the agent’s ability to engage with attendees and follow up diligently.

Therefore, whether open houses “work” can largely depend on the effort and strategies implemented by the real estate agent. In markets where open houses are strategically leveraged, coupled with effective promotion, pricing, and follow-up, they remain a valuable tool in an agent’s arsenal for generating leads and closing sales. As the real estate landscape continues to evolve, so too will the tactics and technologies that enhance the open house experience, making it an evergreen strategy for those willing to innovate and adapt.