Are Open Houses Worth It?

Question

Doug McVinua · Answer

Open Houses can be good, it's an opportunity to meet new faces with at least some interest in real estate. Some of the interest can be snoopy neighbors, especially after a flip as they want to see the finished product. Sometimes others have an interest in selling and are curious of values.

The best opportunity has always been picking up new buyers. They come in, you provide some level of value, build trust and you can assist them in finding the right home.

My first year in real estate in Iowa (1986) I got my license on a Friday, held an open house on Sunday and sold the house to a couple that walked in. I had to sublet the apartment they had for it to close but we got it done and I had a new apartment. lol

Moved to Arizona in 1998 and lived the first year almost entirely off Open House because I had no contacts or book of business.

They can work!

Charlie MacPherson · Answer

@Ryan Ahlgrim I do open houses for four reasons:

1. Find a buyer for the property. I can't source it, but heard a number quoted that "6% of homes sell due to an open house".  That needs a lot more explanation, but the point was that open houses are only one piece of a larger marketing strategy.

2. Prove to the seller that I'm out there doing the work for them.  I'm not doing the classic "3-steps for lazy agents" strategy of list in MLS, put a sign in the front yard, pray.

3. Gain buyer clients.  Many people who show up are just curious.  Some are neighbors who want to see the inside.  But there are many who are actually in the market for a home - even if it's not this one.

4. Gain exposure for my company.  My signs are branded with my logo and each exposure is like getting an "impression" with a Google ad.  If they've seen my Clear Sailing Realty signs several times, it will be easier to gain credibility with a buyer, seller or an agent I want to recruit when we later cross paths.

Account Closed · Answer

@Ryan Ahlgrim As an Investor, I always do my own Opens. I find my buyers that way. I sometimes find sellers too. I am not a real estate agent.

Here is basically what I do.

I do Owner Carry. I hold the NOTE for the long term. I have the property for only 2 to 3 months. And, it can also be done this way for flips (fast cash) as well.

The numbers vary with every deal, but basically, as an example: I use Subject To to buy houses I can cash flow. I use $25,000 or less to buy a $225,000 house for say, $200,000 (so I have built in equity). I Take Over the existing mortgage. No bank qualifying

I recently bought a 4 bed 2 bath in reasonable shape in a good neighborhood in Mesa for $100 down. I put $500 and a month's mortgage payment into it and got $25,000 down from the guy I am selling it to. I have about $25,000 in remaining equity that I will get when he refinances, someday. In this case, I am getting a spread of $750 a month between the mortgage payment I took over and his mortgage payment to me. I don't do any repairs, it's his house to maintain.

I am constantly buying and selling.

Chris Stedman · Answer

Hey Ryan,

I lived in Tulsa for awhile and a good friend of mine and business partner lived in Sapulpa. His names Jeff Schwickerath, he owns a big flea market there, some storage units, and had a few other business ventures, maybe you heard of him.

Anyway, I'm and investor and agent, and I can agree with some of the above. Do it to find future buyers, but don't do it thinking you'll find the buyer for that specific home. I would say this is more beneficial to an agent than an investor, because you just want to sell the house your flipping. You don't care that the person that walked through wants 4 beds instead of the 3 beds in your flip. You just want to move your property as quick as possible. Now unless your doing multiple flips and have other homes you could recommend to them, there is no future benefit.

Moral of the story, you could do 400 open houses and sell 1 property. If your only goal of doing an open house is to get it sold, forget it.

Peter Mckernan · Answer

@Ryan Ahlgrim

I would say that open houses are for sure worthwhile since I have personally had an experience with a buyer coming into an open house and puchasing from me. It was a long term buy, hold, and flip that was not mine. I was not the listing agent either.

I think that this does not happen all the time, but it’s like any venture. There are times when something does not workout every single day, but it is something that will help you out in the long run do to networking.

Shiloh Lundahl · Answer

@Ryan Ahlgrim  I have found that staging houses over the median price point can help sell a home quicker if it is priced well. Sometimes an empty home is hard for people to see themselves living  in.  It probably doesn't matter on the lower price point homes because there is such a high demand for those homes. But the higher price point homes, I think people want to get a sense of what it would feel like to live in those. That's just my opinion.

Lynn McGeein · Answer

I have done many open houses, but I have never sold a particular home to someone who visited that open house.  I do not do Open Houses in occupied homes as there is no way to properly monitor who is in the house and where.  For vacant homes priced right in a good neighborhood, setting up an advertised open house the first weekend of listing, in my opinion, generates even more sense of urgency for buyers who are waiting for a house in that area to pop up.  But I have also had advertised open houses where no one showed at all, a larger percentage than you'd think, especially after the first weekend.   So I think they are a valuable tool under the right circumstances, but way less important than sellers imagine.

Are Open Houses Worth It?

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