In this new real estate market, we have seen a dramatic drop in turnout for most open homes in the East Bay. We recently came upon this article and thought we would post it for you to read.
Industry watchers evaluate the practicality of holding open houses in today's market
By John Voket
RISMEDIA, Jan. 16, 2007-In this age of "virtual tours," "talking houses," and practically every real estate client using the Internet during some segment of their new home search, is the practice of hosting open houses becoming impractical?
While precise figures on the exact number of home sales directly resulting from open house visits remain elusive, it is clear that real estate professionals and industry watchers from across the nation believe the "open house" still plays a vital role in the overall strategy of marketing homes for sale.
Sharon Luther, a Realtor, mediator, and member of the Professional Standards Council, Bay East Association in Castro Valley, CA, bemoaned the lack of hard data to substantiate whether or not open houses serve any relevant purpose.
She suggested in the current market situations where time on the market is increasing markedly and buyers are driving hard bargains, sellers want to see their Realtor "working."
"I think this may be one of the primary reasons why many agents are forced to hold homes open," Luther said. "But in this day and age, most people are hooked in (to considering certain homes) by the Internet, and almost everybody seriously looking to buy a home is pre-qualified, so many of the reasons why we used to hold open houses are no longer applicable."
Delores A. Conway, Director of the Casden Real Estate Economics Forecast at USC's Lusk Center believes that in a hot market a seller has a lot of power because houses don't stay available for long.
"But in a slowing market, houses are staying on longer," she said. "Now the Open House serves as a showcase for the home, and highlights differences to the buyers who have many more options."
Conway believes if Realtors don't hold open houses, their clients will be at a disadvantage. While she concedes that buyers are doing a lot more homework on the Internet, she said open houses still provide a lot more information than the Internet listing.
"Open houses are typically used in normal times, and the cost to hold them is justified because of the competition in the market," Conway said. "While percentages of sales from open houses vary widely, some areas attribute a significantly higher number of sales (to the pratice)."
John Ansbach of RECON Intelligence Services agrees that in recent years, agents have been shying away from open houses as a networking and referral tool.
"None of our clients are stopping it, but it is no longer the consumers' exclusive experience. While in the future, it might be challenging to prove their value in the larger scope of the overall transaction, I think today open houses still earn their keep," Ansbach said. "For a vast majority of professionals it is still a viable experience, and an exhibit of value to both the seller and the buyer."
According to a 2004 survey by the National Association of Realtors, 87 percent of home buyers found open houses very or somewhat useful in their home search.
A 2003 NAR survey showed 72 percent of 3,000 buyers, "…drove by or viewed a house for sale as a result of an Internet search. While 46 percent walked through a house visited online.
Ann Garti, CEO of the Orange County Assoc. of Realtors said judging from the open house announcements in weekend papers in her region, she believes the practice still has purpose.
"However, I have no way of knowing the amount of traffic generated," Garti said.
She pointed out that Prudential Douglas Elliman do full page ads in the NY Times, and Weichert Realtors also use the full-page print advertisement to showcase open house opportunities extensively.
Ann Guiberson, President/CEO of Pinellas Realtor® Organization in Clearwater, Florida agrees with Garti.
"There has been a huge up-tick in open houses; however for years my members have said they are not really effective in helping to sell the home" Guiberson said. "They do it because it makes the seller feel good, and sometimes the Realtor who sits on the open house gets some leads."
Guiberson observed that overall, the real estate industry seems to be returning a era where they are trying to, "go back to the basics. But at the same time, (the industry is) resurrecting tactics that were not especially effective in the last transitioning or buyers' market," she added.
As far as Sharon Luther is concerned, open houses in a world providing a wealth of other electronic options potential buyers can access from the comfort of their own home or desk heavily weigh against this "old school" marketing practice.
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