Open Houses Are A One-Sided Benefits for Agents
Consider the Pros and Cons Before Holding an Open House
Open houses are opportunities for agents and brokers to meet new people, learn about their market, and prospect for new opportunities—but they aren't good for buyers or sellers.
- Nearly half of those who hold open houses held 10 or more in the last year
- Of those who hold open houses, 98.3% promote the event online
- Of those who do not hold open houses, 84.7% said that they weren't worth the time and energy involved
- 27.1% of those who don't hold open houses expressed concern about safety and liability issues
Buyers Don't Buy at Open Houses
Open houses do little in the way of selling property, and it seems that every year, the NAR survey of homebuyers and sellers reflects this reality.
Real estate agents who hold open houses do so in order to generate buzz or gain exposure for their listing—but what good is hype if it doesn't do anything directly to move a buyer closer to closing? And how is buzz quantifiable for the seller? Do even 1% of visitors to an open house make the commitment to buy on the spot?
Inconvenience to Homeowners
Agents allow sellers to believe that open houses are effective for closing a sale; they suggest a deep-clean of the home, severing bake cookies, and spending money to stage the home for making the best impression.
Of the surveyed agents in the study referenced above, more than half (54.6%) of agents who hold open houses said they do so to prospect for future clients, and to benefit their own brand recognition.
What’s disappointing in this strategy and substantially more ironic is that 54.7% of surveyed agents said they hold open houses "to demonstrate to the client that [they’re] working to sell [the] home."
Real estate agents should tell sellers the truth during the first listing appointment: open houses are great for snacks and small talk, but they won't lead to an immediate sale.
One Attorney's Perspective
Doug Miller, a Minnesota attorney specializing in property law and the executive director of CAARE (Consumer Advocates in American Real Estate), advises buyers to forego open houses for a variety of reasons.
"Open houses do not help sellers sell homes, and they certainly do not help buyers buy homes," Miller said in a post on CAARE's website. "In fact, open houses are not only bad for consumers; they are downright dangerous."
Miller reasons that buyers may lose their right to be represented by their own agent if they walk into an open house and agree to be represented by the listing agent during the sale. The potential for commission disputes also increases because a listing broker may refuse to split the commission with a buyer's broker who was brought into the transaction after the open house.
Open houses may still have a special, wasteful place in the real estate cycle— in part because charcuterie boards and rosé are having a big moment with millennial home buyers—and also because they are places where agents and brokers can network. In the American real estate market at-large, it's a rare occurrence for attendees of an open house to submit an offer immediately thereafter.