Sketchy Real Estate Practices

The Open House

In some circles, this is like touching the third rail of politics. Open houses are those wonderful events where a listing agent ejects their seller for a period of time, typically a nice, sunny weekend afternoon, and allows the general populace to come traipsing through their home. Putting aside any concerns of agent safety, theft from open houses, or being ejected from their home, should sellers accede to their agent’s push to do an open house? How about agents? Should we do an open house because the seller demands one or should we educate our sellers on the efficacy of the open house?

There are sellers that will swear by open houses, for a variety of reasons:

  • It’s how we bought our house.
  • Everyone does it.
  • My friends told me we should do one.
  • My agent arm-wrestled me in to doing one.

Conversely, some agents will demand they do an open house because it’s in their “marketing” program. In my opinion, this is kind of like claiming that when we have a cold, that the chicken soup is the cure. The soup certainly makes us feel good, but it does nothing to move the healing process along more quickly.

I think a quick look at some pesky facts will show the same about the efficacy of open houses.

The Buyer

2014 Where the Buyer Found their Home NAR
Profile of Home Buyers & Sellers 2014 | NAR | Page 52

So, we have a mixed bag here on the location of where the buyer found their home; the 9% figure used here represents both yard signs and open houses. So, the quick take away here is that, at best, 8% of buyers found their home via the open house, or at worst, 1% did.

Either way you slice it, that is worse than a 1 in 10 chance that a buyer will purchase the home being held open. I can already hear the arguments cropping up about how not doing an open house cuts the 9% out of potentially purchasing a home held open.

For those arguments, I say:

There's a chance

The Agent

The reality of how seldom homes sell as a result of the open house, does not appear to impact the agent’s reliance upon them in their overall “marketing” mix. I put marketing in quotes there for a reason. Can you guess why? The answer will be revealed after the graphic.

Profile of Home Buyers & Sellers 2014 | NAR | Page 105


Nearly half of all agents that list homes uses the open house in their marketing mix. Five-Oh. Fiddy percent.

So, to recap, and drop some knowledge, a “marketing” process that has a less than 10% chance of success, is used nearly 50% of the time. The reason why an agent would continue to push to do an open house has more to do with their business, than selling the home being held open. Can it really be called a marketing technique for the seller’s benefit, when clearly the open house is being used more as a branding proposition for the listing agent?


Now, some of my past selling clients, bright and intelligent folks all, will be laughing at this point. They’re laughing because they’ve heard me rail on the open house for nearly 13 years. When I first got started in real estate, I was directed to do open houses as a way to build my business and learn the market. Well, learning the market is well and good and does, eventually, benefit consumers. The hiccup for me was the “build my business” bit. My fiduciary responsibility is to the seller. Why am I pimping their home for more business with a technique that has a less than 10% chance of selling their home?

Then a funny thing happened when the market became a strong seller’s market…

A past client engaged my services to sell their home. They had a newborn, and two toddlers, so they were beginning to bust out of the seams of their 1050 square foot ranch. We settled on a list price, and a date to shoot the photos and video of their home. We even chose a list date for their home to become live in the MLS.

And then the Mrs. asks a question that has transformed how I list homes.

Todd, our child has a learning disability that makes it difficult to get back to a normal routine, when the daily routine is interrupted. If you think that there will be a fair amount of traffic for this home, is there some way we can cut down on the inconvenience to my family?

A light bulb went off in my mind and here is exactly what we did:

We captured all the media (photos and video) for their home, created a single property website to answer as many of the potential buyer’s questions as possible, and launched the listing active on a Wednesday. We did not allow any showings on the property until the Open House that was held the following Sunday, from 2 – 4pm. Not.One.Showing. None.

At this open house, we had 140 attendees. Before I left the open house, I had 4 offers in hand, and an additional 5 threats of offers to materialize. By Monday evening, my sellers had 17 offers to review and finally settled on an offer that sold the home for 12% more than the list price.

Moral of the Story – If you are going to allow your home to be held open, make sure that it’s a part of the marketing strategy for your home and that there is a clear plan of attack on how to maximize the impact of your open house to cause your home to be sold.

Secondary Moral – If you are looking to sell your home in today’s market, and are leery of guaranteed sale programs, other antiquated real estate practices, and would like a hand-crafted real estate experience, click on the button below and let’s get to work.


28 Responses to Sketchy Real Estate Practices

  1. Todd you absolutely nailed it! Open Houses are largely for a real estate agents benefit NOT a home owner. An open house is not necessary to sell a home! Period end of story.

  2. Thanks, massrealty! I’ve been on a tear, recently, to pull back the curtain on some rather ridiculous practices in real estate. Exclusive listings, anyone?

  3. A good example of how using the right online marketing materials can enhance the quality of life of the Seller during the process, without jeopardizing the outcome of a successful sale. Few of our Agent’s sellers WANT open houses and using single property websites, or in our case the products we create upload right onto our MLS  — have proven very successful for us in Houston.

  4. Thank you, Judith Sinnard! I’m finding that focusing on the client’s goals, while *the* point of my fiduciary responsibility, apparently rankles folks. 

    Ah well. Here’s to our clients!

  5. Great article, Todd. All the points you make are totally valid (of course). I must admit I loved Open Homes and tried to channel as much of the viewings as possible through them – not only to minimise the inconvenience to the occupants (be they owner occupiers, or tenants), but also because it was a more productive use of my time in showing off the property. Also, as was possibly the case in the Open Home example that you mention in your article, a well attended Open Home with large numbers increases any potential “fear of missing out” and can often encourage people to move to the next step of submitting an offer quicker.

  6. Thanks, TheNewRealEstateAgent! 
    Personally, I think it is all about maximizing the current market situation for the benefit of our real estate clients. In this current seller’s market, it makes sense to optimize the current conditions to the seller’s benefits, as much as possible. While I do not advocate, or practice, a complete “Machiavellian” approach to the current market, I have had agents attend the open houses with their buyers and mutter, “Oh! It’s you again. [while looking at me]” Then turn to their buyers and say, “This home will be sold by tomorrow evening. You see the other buyers at this open house? This is what you will need to compete against to purchase this home.”

    Shoe on the other foot, because of how I stage my open homes, I know the right way to get a seller’s attention on behalf of my buyers in this market. Definitely challenging being a buyer, in today’s market…

  7. Bang on as usual, Todd! Agents don’t host open houses to sell the house. They do it to get buyers, and most of the time it’s not for the house in question. But.. for agents who are new to the business or who are targeting buyers, it can actually be a decent way to build a business base. It’s unfortunate that it takes some nice and likely unsuspecting people willing to allow that lead generation to happen in their kitchen.

    “Real buyers are with real estate agents who schedule appointments.” from

    • Stacy,

      Thank you for the kind words! It’s the lack of understanding, disclosure, or acknowledgment that an open house without a plan of attack is more beneficial to the hosting agent, than the seller. If the sellers are aware and ok with this, then I could not begin to complain.

  8. I respectfully disagree. If you don’t like doing open houses, fine, but there can be a real value for your seller. Open Houses give you the opportunity to demonstrate the positives, overcome objections, get real feedback and educate yourself on the property (It’s called selling). I have had success finding buyers at Open Houses that might never have seen it otherwise. To call it a sketchy practice or imply the seller is being taken advantage of in some way is very misleading. Some sellers like Open Houses & some don’t. I’ll work with them either way. According to your chart it looks like “yard sign/Open House sign is still #3 on the list of where buyers found the home they purchased. “The reality of how seldom homes sell as a result of the open house” might have more to do with the agent than the event.

    • I don’t disagree with you at all that the efficacy of the open house has more to do with the agent than the event itself! That’s part and parcel why I call shenanigans on the practice in the first place. At least in my market place, sellers are still under the impression that open houses are an excellent tool to sell their home. The reality, as shown by NAR’s own stats, is that the practice, as a whole, is not that effective.

      Who’s responsible for consumers believing in the effectiveness of the open house? Do consumers understand just how ineffective open houses are, in general?

      The purpose in calling this practice sketchy is that I don’t believe we, as an industry, do enough to dispel the myth of the effectiveness of open houses, because it is a detriment to our capacity to generate leads for our future business.

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